20 gauge is fine. The 3 male tabs on the microswitches are "normally open", "normally closed" and "common ground". Normally only "normally open" and "common ground" are used; at least that is the way it is in my arcade machine. Common ground is the one on top, and normally open and normally closed are the two in front.
Which brings up the next question, how do you mount it to the wood cabinet so it is not sitting right on the wood?
How do you mount what? If you are talking about a PCB, like an Ultimarc encoder, get some PCB feet, available most anywhere, including from Ultimarc I believe.