Actually, since the head chamber has a slanted wall instead of a vertical one, the squish area is VERY SLIGHTLY increased when the head is shaved. Of course if you modify the combustion chamber to yield additional volume you will likely decrease that area even farther than it was stock!

Yes, and there's also a balance to be struck between what flows best and what combusts best. It's not always beneficial to have as much squish area as possible, but it's always a plus to reduce the clearance to the minimum.

If you happen to have dished pistons, of course, all this is blown into a cocked hat as the effective squish goes to zero in a hurry (unless they are custom pistons with squish areas incorporated...). Only use flattops myself but I thought it bore mentioning.

Flat pistons are the way to go, IMHO.

The only time you have to worry about piston contact vis-a-vis the bearing clearances, is on the exhaust stroke as the compression stroke is pushing down so hard on the piston crown (an "air-spring"). This is also present on the exhaust stroke but is lessened. I expect at lower RPM with a wild cam (lots of overlap) you may get a little "bounce" out of the piston. The contact is most likely when the heat of the engine is greatest (aluminum expands rather a lot) or if you are near engine failure anyway from lack of lube or poor cooling (lots of heat and suddenly expanded clearances).

The biggest factor seems to be thermal expansion of the pistons themselves, and secondarily the rods (which don't actually stretch mechanically -- that's a misnomer). Bearing clearances are only a few thou and I don't think that enlarges in any way. I suspect crank flex is more of a factor... dunno, really. Whatever the causes are, we know experimentally how tight we can and cannot go.

I emphasise again: You CANNOT run such tight clearances as part of an average rebuild -- we put a lot of work into the rods and extreme accuracy throughout the motor to get away with this stuff.