I probably could have gotten away with smaller wire, or stripped the insulation off, too. What I wasn't sure of at all was making the connection to the pickup plates under the Kato frame, and coming up with some kind of removable plug. Success on those issues.
But seriously, nobody notices the wire size. What I have noticed, and it's driven me nuts, is the GP38 stopping cold at some of the darndest places where nothing else ever stops. And because it's heavier than anything else, and pulls more than anything else, a single GP unit coupled to it would just sit then and spin - so you'd reverse it back and forth a couple times to nudge the GP38 back to life. Now watching it creep around is just worth it. I've put up with this since I first bought it.
I'd think this would work just as well for DCC, and there's a lot more gnashing of teeth where that came from.