Yes, Alto is basically an improved version of M800 with better interiors, exteriors & features, and with more power (9ps) & torque (3nm) - though the engine is same (796 CC).
All cars (especially in small segment) generally are slightly sluggish when driven with AC on and/or at full load.
I would recommend for new Alto ahead of 2nd hand cars short-listed by you - briefly, new is new, and besides, Alto serves your preferences well. It's a very successful/preferred small family car, and sells like hot-cake.
Xeta I did not recommend because, unlike your preference, it is not as fuel efficient as Alto - it gives 11/13 in city & 15/17 on highway. Besides, in aspects like maintenance & service cost as well as resale value (your other preferences), it isn't as good as Alto. However, it's very spacious/ comfortable, has much better ride-quality / suspensions, built too is stronger and so is its longevity.
Honesty is not a Spare Wheel that you pull out when in trouble. It's a Steering Wheel that keeps you on the right path throughout the life's journey.
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