Yup, you should keep all runs as short as possible. Also going larger is never a negative on performance, just practical (larger = harder to run, larger terminals) and financial.
If you have #4 and the criteria are met, no reason to spend the money buying new cable. I'd probably use what I had, use fuses maybe and be mindful of the isolator and system to make sure I don't exceed what it can do practically. In the end how often will the max current situation happen? If it's often, then you need to be more concerned than if it might never or once a year or two.
Also would depend to some extent how the voltage is regulated. Your charging system uses battery voltage to adjust itself, so it's not impossible to compensate for the voltage drop by letting the regulator creep up. That might cause other issues (like your other battery and all the other devices in the chain seeing high voltage). But it's one maybe solution. Another simple one is to watch the discharge on the batteries and periodically start the truck to keep it from going super flat so you never get to the point that the house battery consumes very high current for long periods.
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'08 Tacoma TRD - Donna
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