If loopback test works, it should work with an Arduino (assuming DTR works).
First question is why 1.0.5? I have no idea if it will work with non-Arduino drivers, maybe someone else knows. Current versions of the IDE going back to at least 1.5.8 will absolutely work with the CH340G.
Also: which version of Windows and which Arduino and how is it connected?
PS: Don’t waste time with the link, it is of no use with the Arduino environment. The STC-ISP is a downloader for STC processors, a Chinese based 8051 core part with a permanent, non-erasable bootloader. The mystery push button opens VCC which required by the STC parts to initialate the bootloader sequence.