If built properly, it will keep your cab from getting smashed.
An in-cab cage is not necessary, but every little bit helps, right? Especially if you tie it in with the exo.
Most of the exo's I have seen have around 3/4 or 1 inch of gap. I guess then, if the bar bends, it doesn't hit the cab right away, and you could always cut that section out and scab in another piece, if necessary.
Probably no less than 1 1/2 inch tubing, but the cages ive seen are usually 1 3/4 or 2 inch, I think...