That is actually looking good. I have added some code that reduces the servo twitching. I get tridge to look over it tonight and provide a binary (just trying to reduce variables).
I suspect your motors are getting hot because at low throttle when you wouldn't normally be taking off you are getting lots of rpm changes to give the flaps the airflow they need to provide the requested force. Then when you go to high throttle you are probably pushing significantly more current than you would normally on your quad. I would suggest chucking some smaller props on for your bench test. It also looks like the thrust pulsing is being fed back through the pixhawk and causing the pulsing.
Can you set these variables:
That will settle the servo's down a little more too.
Keep in mind that you should be doing your test near hover throttle. That is where the servo movements will be what you expect in flight. You will find they get larger as the throttle drops and get smaller at maximum throttle. This is why they are very twitchy near minimum throttle. I have limited this effect so the movement don't get larger below half throttle but I need to check this as I am working on code that is a fair way in front of master.
Hope this helps,