16 awg wire has a max ampacity of 13 A. Even if you fuse a circuit below that ampacity, you should still have an agreement between wire size and breaker size. A 15 A breaker won't trip until about 12 A or so, meaning your wire should be fine, but I wouldn't bet my house/garage on it. I would always use a minimum of 14 awg for residential wiring. It would be against code to use 16 awg with a 20 A breaker at 120v.
Yes but if you are running your pump off one of the 120volt legs of a 240 volt circuit with a 30amp breaker you are already violating this rule, hence why the 120volt components are fused at 1amp or 10amps for the pump.
Please excuse my ignorance, but is there any difference between the functionality of a fuse and a breaker. Their function is to protect the wiring and devices in an overload situation, and both are designed to break the circuit if a certain amperage is reached, correct?
I ask because I already have a bunch of 16awg wire, and every little bit of savings helps on these projects. Obviously I won't do this at the detriment of safety, which is the reason I'm asking more experienced people.
One other quick note, could you use cat5e wire for the RTD signal wires? That would be awesome I could wire my house to china and back with the extra Ethernet cable I have around the house.