1. Because of this grey area salary in cash is something extraordinary, in the West at least.

2. There is a cap on how much cash you can use in a transaction, in the West at least.

3. If XMR replaced fiat, ALL transactions would be anonymous.

That is partially a false equivalence.

By many accounts moving around and dealing with large values in cash is inconvenient and cumbersome compared with the relative ease of moving crytpo between holders.

To the point where cartels end up with literal huge piles of money in warehouses and resort to complicated operations to try and move it across borders.

Anyone who doesn’t want to risk jail, at least in the US.

Exactly, that doesn't change with crypto-currencies.