Well, since you can have thousands of products/categories, some of them have the same name, the id MUST be there on the link, no other way.

As for the cat id, you can remove them, but if you do so you have to remove them from All product links to avoid duplicated content. And as I mentioned before, zencart by default has it there, that means that it is needed somewhere. Removing it means you risk losing a core feature.

Why do you want to have upper case in the links? People always try to avoid that as much as they can.