Japanese stiltgrass is a pain. The only good part is that it's an annual that gets started anew each year (so pre-emergent products can prevent germination) and it is easy to pull. It makes a lot of seeds, though, so even after controlling one year, it can be back the next. Cutting it low can encourage it to just flower and make seeds low... and you definitely don't want to keep making a 'dust storm' as it blows away your topsoil.
There are groundcover options:
https://extension.umd.edu/resource/groundcovers/
You may have been kidding about the cactus, but we do actually have one that is native but wants sun.
There might be some Carex which are grass-like sedges that would fit the bill as well: 
https://mtcubacenter.org/trials/carex-for-the-mid-atlantic-region/


Christine

Our native cactus is the Eastern Pricklypear (Opuntia humifusa), and it can be found in a variety of locations around the state. I have seen it grow in full sun and semi-shade (under pine and deciduous trees in open woodland), so as long as it's not too heavily shaded, you might be able to get some established. (Like any drought-tolerant plant, they may benefit from being coddled a bit and watered when the weather stays too dry, but after establishing, should be fairly hands-off.) The wild Pricklypear I have seen while hiking in central Maryland aren't always very spiny, so don't depend on them to deter deer.

If this area of the yard isn't lawn or any particular planting and you want to discourage weeds and erosion while deciding how to plant (or planting in stages), you could consider covering the area with a layer of arborist wood chips. Researchers at Patuxent Wildlife Refuge, as an example, have successfully created new pollinator planting beds by dumping about 8 inches of wood chip mulch over an area (even if it's mowed weeds or turf that wasn't removed first), letting that smother the existing vegetation, and planting directly into the mulch (moving aside enough to reach soil). The wood chips break down into soil-amending organic matter and keep most weeds from reaching the surface until they die out. If a slope is not too steep, the mulch will probably stay in place, especially once wet-down by rain.

Miri

You're welcome!