First time build - Steel Frame CNC Router

[JAZZCNC]

I am going to try get access to a mill for this, but if all else fails are there any other options for cutting the steel plates?

Yes easy done without Mill. Print templates stick on steel with spray mount then get some 1mm Cutting discs for grinder which will slice thru that plate like Hot knife thru butter. Follow the lines and away you go will take about 20min per side.

Gantry weight (just side plates and box section) is coming out at roughly 17.5kg @3mm wall thickness. When put together with Z axis, spindle and motors, will this handle OK with the one 3.1Nm motor on the x Axis?

No you'll need either a ratio to increase torque or larger motor. I'd suggest 6.1Nm Nema 34 for X axis and run the whole machine with 65-70V.
Now here's the beauty of this system if you have one already and want to try using Nema 23 3.1nm motor then it's not going to cost you a fortune if doesn't work.
Use nema 23 motor with 1.5:1 Ratio (if using 10mm pitch screws) to increase torque and if it doesn't work then just replace motor with 34 and bore the pulleys to fit new shaft size which will be same or larger than 23. Depending on how you make the motor mount then you may need to alter or change this also.
68Vdc is at the bottom end you'd run nema34 motor and top end for nema 23 so will still give you decent performance so very little risk or cost involved.

Also, I checked the z extension using the 25mm tall bed/spoil board and the below image shows the spindle end going slightly into the bed at full extension. Would it be worth changing the 100 x 50 box section under the x axis rails to 120 x 50 or maybe higher?

How deep.? But in any case I'd lift the Spindle mount up slightly because it's a little low, You only need the Spindle Collet nut sticking slightly below the bottom plate. The slightly higher spindle mount doesn't hurt stabilty and offers some flexabilty if you need to slide the spindle up or down. Which you some times may want to do if using tall material.
I wouldn't sacrifice Strength having too large an extension or hieght for the few times you'll probably need full extension.