Agreed on Pi's in a full sized cab. Tragedy. OK for small builds, but put yourself a PC in there - you can then upgrade as you go along if needed. Also think carefully before design what systems you are going to want it to play. Then imagine yourself in a year imagining what systems you wish you'd built it to play.
Once you got this, buy you PC to match. Agreed on the control point too - I bought a budget joys/buttons set, but soon realised with all the effort putting into build that wanted it to play well on my kinda games (fighting/schmups) - thus ended up buying Sanwa 8 ways.
Then consider:
Display/s
Lighting
Audio
Features (light guns/rotating monitor etc etc etc)
For me, the display thing depends on what your design aims are for your builds. If it's to solely play 80s + early 90s classics, then a CRT makes sense. However, if it's going to be multi-system up to PS2/Wii etc then a LCD might suit better? You can always apply shaders over the top to get effects - again, for me, this is the personal choice of the builder.
Lastly, on the Defender cab recommendation, that depends on what kind of a chap you are:
If you're naturally handy and think in practical terms then I'd say forget simple + go big or go home. You'd thank yourself for it later. However, that's in terms of design challenges (such as curved edges, integrated audio etc) not in terms of pushing the envelopes of "what is an arcade machine." Aircraft Carriers are a no-no for me, as are TVs on sticks with a box put in front of it. For me - try and make it look like an arcade machine.
If you struggle to put up a shelf, then buy a pre-made kit.
Alternatively, build a log cabin and call it "Dennis"