The late/hard shifting you mention is nearly endemic to the model/tranny. I've owned 6 740/940's and each has displayed this characteristic to some degree. The kickdown cable seems to get "sticky" within the sheath. You can try directing some atf down the sheath from the engine end. I have used an old oil applicator like this one: http://www.shutterstock.com/pic-162842414/stock-vector-oiler-can-symbol.html?src=BPAFhmEy13dpx4Hggebs8Q-1-4
Having the nose of the car elevated helps as well. Not a cure all but helps. And yes you should have a decent amount of looseness/slack in cable. Personally I have simply learned to live with it.