Like Boskonay said you need to put insulating joiners where the points meet on the crossing, that will stop the short occurring.
As for the gaps in the track, I would'nt worry about them damaging wheels it's only an issue if stock is derailing. It's a good idea to leave a small gap at a join to allow for expansion of the track in hot weather.
I have also read comments on forums where modellers cut gaps in the track to simulate the "click-clack" of real rolling stock travelling over joints in the track.
Can you post a pic of the gaps that you're worried about?