If I were you I might try deploying a mini enterprise network with permissions and things. It would be fun to do it with active directory to try to practice pentesting, or it would also be fun to do with linux to try to learn more about deploying linux in enterprise environments.
I think you are right that people want a solution to a problem they don't have, but I think in this case they may just want to run executable files as sudo from a GUI.
IDK exactly what hyprland is. I think it is a Wayland DE or WM or something. Seems to be popular on unixporn.
I like CLI 'cause I use it a lot for servers and find a file manager to usually be more than I need, though sometimes being able to see all the icons in a GUI or whatever can be nice. I also use a linux server that I manage through the terminal, so I am used to it.
Wayland and xorg are display servers. They basically help draw windows on the screen, and help with input to different windows and things. Xorg has been around a while and has good support, but has security issues. The main one that I know of is that all keystrokes are sent to all running apps in xorg, so making keyloggers is really easy. Wayland is more secure in that regard, but has performance and stability issues, especially on nvidia GPUs. People argue about them because people like to argue, idk.
I was looking for something like this a little while ago but couldn't find anything and this looks perfect. My server is mostly docker only so I might try to figure it out.
I would give them full on Linux, just put parental controls on the router.