Is the cooling kit necessary?
100%, yes. If you want something similar but without watercooling, pick up an S3 or S5.
Great work on the guide! I gave up on the gibberish instructions with the kit. I am noticing a massive amount of "discarded" shares...
Is this normal?
Discards are entirely normal and shouldn't really be displayed at all as they're meaningless in regards to mining performance. Think of it as someone counting how many times you close your front door on the way to work, in a work performance report.