We looked at both options. These are mechanical switches, not induction sensors. To do the "sideways" approach would have required ramp-like actuators that would have been harder to make adjustable. The switches that we chose have more than 5mm of over-travel, and we can adjust the hard stops so they hit about 4mm after the switch trips. Hopefully the hard stops are robust enough to handle a full-speed impact; they are pretty beefy. If a switch does get smashed, they aren't terribly expensive to replace.
Good catch; yes. The 10 foot long 35mm rails were a lucky find at a surplus dealer, but they came with only two cars. The other two were purchased on Ebay. We couldn't find four of the same type, but we made it work.
Thanks, and the same to you!