In regards to Huxley, I've only seen one person try to engage with BNW so if you'd like to do so, feel free. Selrahc has, but my rebuttal there is that both versions of Mankind live in cages -- Huxley was just aware of the cage he constructed while Banks seems unaware.
Why is it a cage? Or since there is basically no way to imagine a universe that doesn't limit people in some form: specifically, why is it a cage in the same way as a Brave New World, while 40kverse and real world apparently aren't?

was the Human-to-Mind thing ever done? If so, why?
It wasn't done in novel, but it was mentioned. A human in Excession was feeling dissatisfied/depressed due to the collapse of a long term relationship, and was contemplating responses. Other things briefly considered and rejected were becoming an alien, an AI drone, or other radical changes of identity. Since it wasn't discussed in great detail, the exact process wasn't talked about, and the individual in question elected to go into stasis for a while instead, before events overtook them.