Couldn't I just boot from CD and use GParted to remove the partition and move everything else "to the left"?
I'm not booting from it so it's not doing anything, right?
I don't think you'll be able to move the entire extended partition to the left.

Yea, I read about that when first getting set up with Ubuntu. Can't remember why I didn't. Think I read somewhere that separating out the data means your drive head has to run about more and wears it down slightly quicker or something. Also, might it complicate things if I have 32bit distros alongside 64bit ones? (my laptop can convincingly emulate 64bit apparently, good for testing during development)
I don't know anything about wearing your hdd down quicker.
Yes, if you are using more than one distro, you don't want a /home for each of them. There are other ways to do that. However, the advantages of having a /home for your main distro are very nice.

I wouldn't worry too much about grub, it's a matter of 2 commands to reinstall or move. Sometimes only one command.

So, say you have two copies of Ubuntu installed side by side. Every time you do a kernel update the boot menu appears to be reordered, putting the latest installed kernel at the top. Does that mean that as part of the process of updating the kernel grub is moved to the updating partition?
If I understand you correctly, the answer to that is yes. For example, just about everyday when I update Natty on Ubuntu & Kubuntu, I have to reinstall grub2 to the system I want it on, but Natty gets a lot of updates right now, and the version of grub it uses is technically 1.99 as opposed to 1.98.