It's cages all the way for me! A tank can be easier to set up but I don't like the glass wall between me and the hamster! And I do like front opening cages
They are entirely different things in my view, with pros and cons. I find I can be more creative with a cage because you can attach things to the bars (and yes there's the ventilation too). And even if a hamster is ok with top access only - I couldn't get on with that at all! Maybe what you get used to.
I think the idea of making things is to save money basically and yes it's easy to make a cage nice and creative without painting things. Plastikote is for water proofing the wood and sets hard - so why not make it colourful as well. Personally I wouldn't use anything else and won't even use food grade food dyes for humans! At one time I wouldn't even use plastikote! But I have rarely had a hamster chew a wood house (or any wood item) so relaxed a bit about it.
You just have to be sensible really - if it's something the hamster is unlikely to chew anyway then maybe not worry too much. If you have a very chewy hamster I wouldn't paint anything! But you can still make nice toys and shelves with wood dowels etc.
There are plenty of toys you buy that are coloured - the rosewood dangly things, the coloured cube hole things and the cheese wedge. It would be nice to know what paints they use but never had an issue using them.
I love the idea of making your own paints and dyes! I know someone who used to do this for dying wool. She used to spin wool and dye it. She mainly used green and brown - tea bags for brown dye and boiled nettles for green dye. Boiled betroot would make a red dye.