Re: shear-wall & plumbing
Welcome to the wonderful world of remodeling.
You can cut the walls if you're sure they're not a load bearing wall. Be sure about this though, you don't need the rest of the house sagging there.
The plumbing is a nuisance and you'll be tearing out more walls than you thought and maybe some flooring if you want to move the pipes. If it were me, I'd be talking with a plumber right about now. Water problems are not something that you want to have, once the job's done.