To address your questions on the Igaging Absolute scales:
The scales should be able to keep up with the cross slide, but there is a slight lag when the moving the scales quickly. I would say maybe 1/10 second, it is noticeable relative to glass scale readers. I believe this has to do with the refresh rate of the display. The scales are absolute in design, so they always retain their position whether they on/off or quickly advanced, this was a problem with the older scales.
The cables could be shortened but have not done that, I just folded the wire up and placed it in some shrink tubing.
I do a lot of small work pieces with a 5C collet system and also boring which requires resolution to 0.001" for everything to fit correctly. With the Igaging on the tailstock, you should be good for +/- 0.001".