I chop wires all the time.
It is not advisable. Is it advisable to climb a tree and use a chainsaw? Nope. Not unless you are a professional arborist. There is a little phone bag that you can put up at the stem. By making a little slit in it you can stuff the extra wires inside, including the thick wire to the display. Where you have the speed sensor is fine. But make sure you have set wheel diameter or the speed will be off by some percentage. Do not run lights from the bike's battery or the yellow speed sensor output. Simple USB rechargeable lights are much better, with less wire.
Here is a photo of a Bafang HD build where I cleaned it up by ditching the wires in a phone sack. Bafang builds are notoriously messy.
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