It's wonderful that you have decided to adopt a dog that really needs a good home! As far as answering your question about who I think the shelter will pick, I actually think they might go with the older couple. As I haven't met this dog, I am going purely by the information you provided.
I assume that because he has been in a cage his whole life, he is fearful and probably relatively unsocialized. That makes me think that he would be better in a home that has less chaos than a home like yours with teenagers and other dogs. Also, because of his health issues, he might be better off with a couple that has more time, like the older couple, to manage his healthcare.
With all that said, I think you do have the advantage in that you are younger and more active. Small dogs can live a very long time (20 years!!) and because the couple in already in their 80s and the dog is only 8, you could provide a more stable, lasting and forever home.
Either way, this dog is so very fortunate that he has not one but two homes that want him. Best of luck to you and Malcolm!