RE: String and cable stretch?
As long as yoour peep is rotating correctly, I would only mess with the cable. A twist or two should do the trick.
As for the WC w/ X-coat yes they do help on some bows, but they also "drag" through the slide sometimes too causing abnormal wear on the X-coat. Usually it's symptom of a cable slide that is not smooth enough in the grooves. I would try getting ahold of Hicks "tournament" slide (white one) and the just order which cable you prefer.
Serving the cable where it runs through the slide is a bad idea as serving material is not smooth enough...it will catch and drag and tear your slide and serving/cable up. The only way that will work is on the Mathews roller guard style bows.
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