Peacock eels tend to be one of the better spiny eels to keep with other fish since they have fairly small mouths, some can be very timid, I've never owned one, but I have two fire eels and a tire track (I've also owned a zigzag eel), my fire eel was quite shy when he was under 6 or 7", my other two are still small, but aren't as timid as when I first got them. I kind of drifted off what I was saying (whoops), my point with that was, because some can be shy, they don't always come right out during feeding when there are other fish in the aquarium, and can some times be bullied. If Danny is a bit shy, I would recommend trying hand feeding, that will get him used to you, and more involved in feeding time.
Because your aquarium is only 20 gallons, I wouldn't recommend getting too many tank mates, since you won't be getting another one for a little while. You could get another peacock eel, since I believe they do well with each other, any peaceful to semi aggressive fish over 1.5-2" fish would work. I would stay away from slimmer bodied fish, such as endlers, since they may get eaten. Some good tank mates would be corydora catfish, pretty much of any kind, glass catfish (minimum group of 5), German ram, dwarf gourami (two males should not be housed together), a betta fish (two males cannot be kept together, a male and a female cannot be kept together, if you want to keep a female, then either one or at least five (females in groups of less than five shouldn't be kept together, unless you're only keeping one) betta fish cannot be kept with gourami fish, and it's best not to keep colorful fish with male bettas), guppies (minimum group of 3), kuhli loaches (minimum group of 5), dwarf loaches (minimum group of 5), platies (minimum group of 3), bristlenose pleco, rubber lip pleco, any of the apistogramma species around 3", featherfin rainbowfish, boesemani rainbowfish, and silver or marbled hatchetfish. Oto catfish should work, but I can't guarantee you they won't get eaten. Keep in mind, 20 gallons is already fairly small, I believe peacock eels require a minimum tank of 29 gallons, but if you're most definitely upgrading, then it would probably be okay to add in some other tank mates. Just be careful not to overstock, and keep an eye on your ammonia, nitrite and nitrate levels. I would recommend making it so the aquarium is active at the top, middle and bottom, and perhaps having a small algae eater like amano shrimp or oto catfish, a bristlenose or rubber lip pleco would work as long as your aquarium isn't too stocked.
Also, what type of substrate are you keeping in your aquarium? Sand would be the most ideal, but smooth gravel works as well. If your gravel is sharp at all, I would advise switching it out for sand, since most spiny eels do like to borrow, and if they get wounded while doing so it can result in a bacterial infection. Spiny eels have very sensitive skin, and are prone to many skin infections, and because they are sensitive to many of the medications, treatment can be difficult, if you have good lighting, I would recommend getting some plants (most eels love to hide in them), if you don't already. If your lighting is not that great, there are a few low light plants you can buy, if you buy plants and don't have sufficient lighting then you and your fish will be treated with the nice gift of ammonia.
