At the end of the day, every engine has a "perfect" spot where it is doing the work required using the least amount of fuel. This "spot" is different based on how much work is being done. Driving 80 mph on flat ground will result in one rpm for max efficiency, and it will be different than 40mph climbing a 10% grade....etc. The idea behind the "continually variable transmission" is that the computer can keep the engine close to the perfect zone at all times, based on work being done (load). This is why cars with CVTs always will have the best mpg ratings (all other things equal). The most efficient working zone, from what I've read, is not peak HP or TQ (unless that is exactly what's required for the conditions).
The VAST majority of losses are to heat, and thus end up exiting via the radiator and/or the exhaust. Most engines are 30% efficient, AT BEST....with the majority more like 20%. We all drive furnaces with just a small by-product of mechanical energy.
Yea...I'm gonna need you to move a little to the left.....yea