The difference between redline and fuel cut isn't that tough to grasp. But you're right, it's good to know other people know about it.
Anyway, your optimal shift point is going to depend on dyno numbers. You don't HAVE to shift until around 7800 rpm, correct. To make the engine rev to 8200, I'd probably upgrade things like valves, retainers and springs. I think the bottom end could handle it. However, I'm not sure if the stock H22 cams make power up there. You may need to get some aftermarkets (or MAYBE some Type-S cams) to realize any power above 7800.