There's definitely flex in the front end, there's no doubt about that. The frames on these cars are nothing more than formed 14 gauge sheet metal, so yeah, there's flex.Twist is probably a bigger issue than plain vertical flex, but its still there.
As far as "high strength steel", that's a joke right? Literally, the frames of these cars are made out of 14 gauge sheet metal. It's doubled up in a few places (near the bumper mounts), but thats it. It's just mild steel sheetmetal, there's absolutely nothing "high strength" about it. Welding to it will have no dire consequences, no carbon migration, heat quench issues, etc.
As far as the inner fender support goes, I like the look of it and how it conforms to the body panels. That said, I think its too much tubing and not enough contact points with the original frame. The length of the tubing will allow it to flex as well, and without more tie-ins with the original structure it may deflect more than you think. I'm not saying that it wouldn't help, but I think inner fender braces like the ones XV sells would actually help more (firewall to upper shock support only). Its a short piece of tubing, so less flex in it, and it makes a decent box out of the shock mount and fire wall to stiffen the frame below. Of course, you still need to box the upper shock mount to make it work well.
When you think about stiffening chassis, you have to think about making "boxes". With a connector running from the upper shock mount to the firewall, you're not just adding the brace, but also a moment arm- the vertical distance from the upper shock mount and the frame and the firewall and the frame. That parallel link makes a box that significantly strengthens the frame rail's bending moment. The long tube that you've made still attaches low on the frame, so, you're not getting additional strength from the boxing of the framerail, just the additional strength of the tubing itself. Now, if you used a plate to weld it into the frame structure where it passes through that lower hole,and tied it into the firewall at the top of the bend with an additional section of tube and anchor plate, you'd have a pretty strong brace.