Service mode cables
 

Today I put my top into service mode for the first time, and the cable and hooks were not connected, it's been like that since I've owned it, about a year, is that bad for it to be like that?

No...not bad at all. Just make sure you connect everything...which Im sure you have and you should be worry free.

I noticed now that the cables are connected my too doesn't close all the way, until I latch it. I'm guessing that is how it should be. Without the cables it would pretty much completely close before latching it

That's the norm...
 

... the fabric has to stretch a bit to reduce drag.
The tension ropes have twofold responsibilities:
a) put tension on the fabric when the top is closed
b) prevent the rear end of the top to 'float" during high speed runs.
Happy Boxstering,
Pedro