To develop some of the good points you made, and to clarify at least one issue.
The 'big' V 'small' aircraft issue. Yep more people die if you make a mistake, but I'm not sure that would make you feel any better. Also pay. The lads (and ladies) that work aircraft > 5700kg get paid more than light aircraft workers. It's the way it's always been in my 20 years experience. There are exceptions I'm sure, but take a large representative number for each side and you will see a marked difference in average take home pay.
To clarify one point on small aircraft radio work, your licence allows you to install and repair radio installations. It does not give you the right to open the unit's and repair them. For that you need an approved shop. More books and lots more test equipment, and associated procedure manuals etc etc.
Wiring in small aircraft is strange. New installations are getting easier, as more and more equipment 'talks' to each other using data busses. So the total 'wire count' is decreasing. But, you will encounter many aircraft with old wiring and in some cases 'home made' installations. That can be pretty tricky, as a wiring diagram is not always available.
To the key question you asked could you make this pay?? - From the position you appear to be in, my honest answer would be no. The set up costs is high. The continued running costs are a factor. Gaining enough experience and qualifications will be time consuming and expensive.
I think your right, the CAA licence will come to an end. Replaced by some EASA equivalent over the next few years. Plans are already afoot as I understand it.
Finally a suggestion. The above seems hugely negative as I read it back. All problems!! Maybe the way forward is to try to get some time with an avionics firm. Even if you worked free for a week you could see first hand the work they do and more importantly whether you think you could make a go of a career in the avionics industry
All the best mate
Regards
The Doc