I'm big fan of going overboard with shielding, but not because I can claim it improves SQ - mostly just for the fun of doing it. I have zilch EE or other scientific training. So what follows are just my almost entirely uninformed musings.
... I prefer my cat7 as the insulation quality is very good and it's a bit thicker 22awg solid core and best of all it has mylar shielding on each individual twisted pair AND a 50% coverage copper braided shield so I feel it's just a better cable that stock.
The impact of wire gauge on signal wire is discussed at length on various audio forums. I have no opinion on what impact it might have for input signal wiring carrying a relatively weak signal. On my most recent Stereomour build I substituted some 22 or 20 awg cryo-treated OCC copper wire (remnants that I got for cheap) on one set of inputs. The amp is still breaking and I haven't yet done any AxB comparisons.
Re mylar shielding each pair of wires. I assume this is to prevent one signal in the cable from interfering with another signal in the cable? My guess would be that the potential for such interference over 12 inches of cable that at any one time carries only one set of weak left and right signal inputs is negligible, but could be an issue over much longer runs and/or for higher power signals, and/or where each pair in the cable carries a different signal at the same time. Dunno. My guess is that the bigger concern with weak signals is to protect them from stronger outside interference -- e.g., from nearby transformers or high power wiring. My approach (again, mostly just for fun) is to run the entire cat cable through solid copper tubing that is wired to ground. I use refridgerant tubing - it's cheap and easy to bend and cut. I've also doubled up the shielding on occasions, by shielding individual wires in tinned copper braid (which gives about 80% coverage) and then running them all through solid copper tubing. But these approaches might not appeal to you aesthetically. I kinda like the amateur mod look. And it can be a real PITA to solder drain wire to the braid and copper tubing and them run the drain to ground. And the added volume of all that extra shielding can make wire routing a bit challenging.
I'm then looking for some good replacements for the shielded twisted power switch wire and the wiring to the tubes that use that same twisted pair shielded cable. I have yet to find anything on that though.
I use copper tubing for the straight run wiring to the switch, and copper braid for the more bendy runs. Again, all wired to chassis ground. The braid is wrapped in shrink tube or non-conductive tape to prevent contact with other terminals and wires.
... how come the kit instructions don't heat shrink a lot of the exposed terminals like on the IEC and what not.
Covering all the terminals could make resistance and voltage testing difficult - where would you attach the leads? It would also make it difficult to troubleshoot soldering issues and to make subsequent wiring mods (e.g., that require a new attachment to the same terminal).
Good luck with the build!
cheers,
Derek