I understand that most people daisy chain from one button to another.
Main advantage is that this gives you a shorter path and less total wire used. Other advantage is that you don't need a terminal block to take 28 wires into one or two terminals. (Some say troubleshooting is easier, but that's not really the case).
Do you use 1 long piece of wire and strip off some insulation where your contact point is and run it to all the buttons or do you use a small piece of wire between each button, or does it even matter?
For solder connnections, it's probably easier to use one long wire, and strip the insulation between each joint. For crimp connections, it's easier to use individual pieces of wire. In other words - Strip insulation and screw wire into ground terminal. Route a little bit past Button 1 microswitch, cut and strip insulation (about 1/4-inch from end). Cut and strip 1/4-inch insulation from wire spool and crimp to wire from ground terminal. Plug connector onto microswitch. Route a little bit past Button 2 microswitch, cut and strip insulation . . . (Also, you want the shortest path, not necessarily Button 1 to 2 to 3 to 4 to 5. You can use multiple daisy-chains if that is easier, more convenient, etc.)
Also, it makes no real difference whether I 'complete the loop' back to the ground on the encoder right? That is, its not necessary?
The advantage of completing the loop is as follows:
Open Loop - One break in a wire and all buttons "downstream" of the break stop responding.
Closed Loop - One break in a wire has no effect. Two breaks and some "group" of buttons will stop responding.
However, remember that the wire and crimp connectors are not reusable - i.e. if you go the open loop method to save time (only missing one wire segment) and then want to "close the loop" you will have to cut off the last terminal and replace it. If you barely had enough wire to reach the switch, it might not reach after you cut it off, so you have to replace the last two connectors, and so on . . .