In the second question of critical thickness, why aren't we using temperature in Kelvin? Everywhere else in the question temperature is taken in Kelvin!
Thickness of insulation is Radius if insulation-Radius of cable= (0.02m-0.0025m)=0.0175m. It is basically the thickness of insulation material used. Since we consider Rc from centre of the cable we have to subtract the radius of cable from critical radius to obtain thickness of insulation