marble cloak
A smaller area similar to the savanna but between the desert and forest, with cracked dirt that doesn't grow any grass but has dead trees (could be used for an old-western themed furniture set), shrubs, cacti, and tumbleweeds. The rocks and background could be canyon themed, maybe even with a separate canyon ecotone that spawns close to the world's edge.
rigid plinth
ooh, this could be cool.
(also, why not make the canyon beween the desert/forest? it could provide an interesting challenge for players, and allow easier caving earlygame.)
(alternatively, I really like the idea of some item hidden at the bottom of the canyon...)
marble cloak
I feel like a canyon proper would be more fitting near the end of the world, maybe behind the dungeon. Wouldn't be any actual cave entrances, just a giant dip (world gen likes doing this in that area anyway)
As for caving, regular cave formation in the wastelands would work great, like an old abandoned gold mine, perfect for the western theme
I made some small scale in-game examples to better illustrate
