Gary,

I can't answer all your questions, but here is what I can tell you.

Putting everything in the boiler reduces the number of wires you need between the tender and engine.  But if you can't fit everything, or just some of the things in the boiler also may reduce the number of wires.  On the other hand, Rivarossi locos are light.  Putting things in the tender allows to add a little more weight in the boiler.  Don't over do it.  I did that to one of my Rivarossi locos and the weight bent one of the articulated engines (trucks). So I took out some of the weight.

Putting a speaker under the smoke stack does make for a more realistic sound coming out of a tunnel.  On the other hand, the tender makes a great baffle and you get better overall sound, particularly bass, from a tender mounted speaker.

If you 2-8-8-2 has a centipede tender, be sure to check out my instructions for getting it open.  These instructions are listed with my other decoder install instructions.

Soundtraxx, NCE, and TCS all offer small connectors that make running wires from between the engine and tender easy.

Allan Gartner
Wiring for DCC

Yes, any wires you don't need just cut short.  If you ever thing you may need them, don't cut them too short!  Most "extra" wires can be used to put a light in your cab or marker lights.  For extra insurance if you are worried they may touch something metal, put a little piece of heat shrink tubing over the ends.  If you have a couple of wires you won't need, they can all go in the same piece of heat shrink.  Wires that are side-by-side can't short to each other as long as you snip any exposed ends off.

Allan