In regards to the crossection of a wire, and a larger wire carrying more current, consider that the power wires we use for rc are multi-strand, and there are a bunch! So, I think that eliminates the possible problems with skinning, because there are so many wires for the current to travel over.

Also, if you figure the max current spike carried is nearly 35 amps, at 7 volts, thats 245 watts. Now, think about car audio and the diameter of the speaker leads. Much more watts, in many cases, are transmitted over wire with no larger diameter than that used in RC.