Your point is important:
(1) A small amount of pick exposure means that the distance to the pick tip is short, hence the pick won’t move that much when it experiences the torque of pushing a string. I think that this helps keep his measurement process really accurate, and lets him relax his grip as much as possible.
(2) The flesh of his fingers is another measurement sensor to help keep him correcctly configured for maximum speed.
Rusty is amazing, I love his “shallow thinking.” 
IDK… If I were a betting man, I would say the fact that he has some pretty visually developed forearms, combined with a pretty impressive rotation to boot and is using pretty small pick strokes has a lot more to do with it than where he’s holding the pick. I have a feeling he would be able to cut through those strings no matter where he was holding it.
Yes! But note that he carefully avoids doing this. Why? Another great question for him!
I think one problem with cutting through strings—particlarly when the depth changes—is the irregularity that results, given the eventual deflection of the pick by the strings.
Shallow, in short, makes a whole bunch of sense.
It does, and I’m a strong proponent of this in fact, he looks like he is not moving that pick any further than he has to, and the amount of forearm rotation he is using is very even and controlled, but my point was more that the pick depth aspect may not be as much of a game changer for him as it might be for someone else. For him it might just be that last 1%.
I think the “guard rail” concept (or if you prefer “training wheels”, though people may take that to be pejorative) is the biggest reason so many aspiring shredders use a choked up grip and profess love for small picks like the “standard” Jazz III.
I think “training wheels” is really apt, because used properly, training wheels aren’t meant to be in constant contact with the ground. Rather, they’re meant to save you from falling if you go off balance (or off “center” if you will). A choked up pick grip provides tactile feedback if you attempt a motion that would result in a “deeper than intended” pickstroke.
Note that I’m not saying that’s what people should do. I’m merely observing that I think it’s why a lot of people decide they want to use that style of grip (or why they like a small pick), even if they can’t articulate how it’s helping them.
I do think that in general, some kind of tactile feedback or and/or “reference bracing” can help people pick with consistent depth (and perhaps even train their muscles to make a movement that produces pickstrokes with consistent depth). For example, I think some players accomplish this with contact of the wrist or heel of the thumb against the strings, the guitar face or the bridge. Fingers on the guitar face (typically in the pickguard area) can accomplish this too.
As one particular example, I think the way Michael Angelo Batio braces his fingers against the guitar face is a key to his ability to have very fast and consistent pickstrokes, even with an aggressive attack. In fact, I think MAB’s approach to fast alternate picking also overcomes the “string deflection problem”, because the way his arm is arched and fingers braced creates a rigid frame where he is “sinking” downward force that is opposed by the normal force of the guitar face, and any upward force of the strings against the pick is overcome by the surplus of downward force his arm has as it presses against the guitar face. Not that he has to press incredibly hard, but by applying even slight/moderate pressure in support of the arched arm, he can produce a picking motion that won’t be perturbed significantly by resistance from the string.
I think the word definition is perfect in terms of picking.
I love all types of picks rounded, pointed, stiff, floppy. They all have a different feel and it makes playing more intresting.
But from a purely sound point of view… Rounder picks LITERALLY have a rounder sound. And pointed a more defined/hot sound.
It all comes from the release of the pick, it’s either slower/rounder or quicker/sharper.
You can literally hear it. A rounder pick has a slight Rummm sound and a sharper a Ringggg sound. It’s all in how fast the string releases from the picks grip. Round slow, point fast.