The transformer should be in an accessible location. There should be a switch between the 120V line and the transformer. You really don't want to have the transformer being fed electricity all the time. Using the transformer as a junction box is not the best idea. In other words, probably no.

Any changes to electrical wiring would be a LOT easier (which means cheaper for you) before the drywall goes up. As for the cost of changes, that would be difficult to estimate without knowing exactly what you have now and what you need for the different appliances.

Sometimes walking away is the best option if you can't come to terms. When I was buying a new townhouse 26 years ago, we were very close. The only sticking point in the Purchase and Sale was a finished basement option which at the time was only about $2500. The developer didn't think he could finish the basement by the closing date but insisted we pay the full amount at closing - we should trust him to do the work. My lawyer insisted that we either hold back half the money or move the closing date - both reasonable options. After spending 6 hours in their lawyers office hammering out the wording to withhold the money, the seller adamantly refused to sign. We walked away and quite frankly I was relieved - I had started having other misgivings about the house. My lawyer told me things happen for the best. Their realtor kept calling me for months, trying to get me back and telling me to fire my lawyer and they would sell to me. Yeah, right! I took my time and looked at other places and ended up finding one I liked a lot better in a better location (a little more expensive) and have been living here for 26 years now. Good luck.

The main issue with safety of wiring in any place is the risk of damage to the wire, by, say walking on it. Since you said BX, you do mean the armoured cable, right? Where I am in Canada, they only use Romex (non-armoured) under islands etc, the code allowing this because the wires are enclosed. Provided the wires are not damaged in any way, they are quite waterproof and presumably there are no junction boxes or anything at that floor level, so at worst, they could be lying in a pool of water. For that matter, if you had a flood in the kitchen, and water ran through the floor into a light fixture in the floor below, you could potentially be in the same situation, yet it's allowed. If you were really concerned, you could have that breaker replaced with a GFCI one (what do these wires supply power to anyway?) which certainly couldn't hurt. I'm not an electrician but I work with electricity as part of my job and I see a lot of new construction, and, like I said, if it's armoured cable, it's *better* than most of what I see, so from what you've said, I wouldn't worry. As for the gap, it keeps the kick out of any potential water and allows some airflow. If the kick is a clip-on panel, you may be able to slide it down.