WereBo

I'm not really clued up on the various PC cases and what's the best for cooling and so on, but there's lots of threads here covering that topic, or another more clued-up member can chip in with some suggestions. There's also some posts about wooden cases here, too. They might give you some ideas about a wooden case. As long as you cut holes for fans, there's not a great problem with cooling.

One thing I've just thought of though, is switching the thing on, your present suggestion would entail having to walk through into the closet to hit the power switch, every time you wanted to switch it on. Depending on your building skills, could you build a PC front shaped hole in the wall, so just the front of the PC is flush with the wall on your side?

That way, you could power-up when you wanted and also have access to an internal CD/DVD drive in the PC, eliminating the need for a USB-drive.