Any question answered...

That should be fine, you'll just have to make sure you have the derailler limit screws set correctly to stop the chain coming off. Probably best to have the "spare" gears at the bottom end of the cassette so you aren't trying to pull more cable through then you're in the easiest gear, as this *could *lead to the cable stretching more.

That's probably bollocks but that's how I'd do it.

I'm afraid i'd disagree with you.
Having the 'spare' gears at the bottom end of the cassette will mean that the shifter can easily be put into a position that will slacken the cable which could then come out of a guide or catch on something.
Put them at the top and the cable will never go slack and you'd have to be a ham fisted idiot to wrench on the lever enough to stretch the cable.
Lots of shifter can over shift at the top end anyway so your set up will be no different to this.