Hi Nick,
I do see one problem with the wiring on sheet 1. Below the Sumtak MPG there are switches switching the KFLOP JP5 pins directly to 5V. The KFlop inputs are 3.3V inputs made 5V tolerable using a 47 ohm series resistor. It probably wouldn't cause damage but it is better to limit the input voltage to less than 3.8V. Also a pull down resistor is needed. Otherwise when the switch opens the input will just "float" to any voltage and will not necessarily go low. One approach would be to use two resistors to form a voltage divider (500ohm and 1K).
Regarding the C Programs. Yes normally they are all combined into one initialization program the initializes all the axes and your system and then enters a loop servicing whatever is needed (MPG, watchdog, switch inputs, etc..) But you can start having them in several programs which makes debugging easier.
Regards