I took all your suggestions into consideration (it was a huge help). I liked the suggestion to make the control panel just slightly wider than the cabinet itself (only by a few inches, thanks johnperkins21 and steveh). There is a perfect amount of elbow room now. I will upload my measurements sometime this week. While it still has a few cosmetic changes, it has been quite popular when we have company.
The top left joystick is the 4-way joystick. The top 3 buttons are for the 4 way joystick and trackball (not yet installed). It is positioned far enough away from the trackball so nobody not bashes their fingers when playing bowling.
The 2 red joysticks are 8-way. I used 7 buttons because I wanted a similar feel for when playing the neo-geo games.
My only regret was placing the Player 1 and Player 2 start buttons so close to each other. I initially did this to keep the control panel looking clean. But on default, MAME exits when you press both these buttons simultaneously. When you are really into the game, and you slam on the buttons, your fingers will accidentally hit both buttons if you are not paying any attention. To work around this I am going to reconfigure mame to exit on a different button combination.
On the sides, I have easy access coin insert buttons.
There is still a lot of work that needs to be done with the cabinet:
1) Trackball (golden tee and bowling games)
2) Marquee (Fiance' is a graphic design major, and is coming up designs), the marquee that came with the cabinet just doesn't cut it
3) Sides (Fiance' is coming up with some graphics here as well, will be red and black)
4) T-Molding around edges and control panel
5) Black Textured Vinyl Laminate on the control panel (or some scratch resistant plexi-glass)
6) Those T-Brackets are pretty ugly there. Those are just temporary for support. I will add more support and remove those when the time is ready.
I'll post more as development progresses. Thanks for all your ideas!