When is it appropriate to galvanically isolate components/subsytems?
Your post was way too long to read, but it seems to be asking about isolation when a common ground is used.

If various subcircuits share a common ground, then they are not isolated.  Put another way, everything that shares a common connection is all one circuit.  Therefore adding isolation between sections of such a circuit is pointless unless there are other reasons than a misguided attempt to "isolate" parts of the same circuit which are inherently already not isolated.

Your confusion seems to come from the fact that you have some parts of the circuit that run on 5 V and some parts that use a 400 V.  That means you need to pay attention to high voltage issues and make sure the low voltage circuitry and any external user-touchable parts don't get exposed to the high voltage.  For example, there is nothing wrong with using a voltage divider to scale the 400 V down to 4 V so that it can be measured via the A/D input of a microcontroller.  The micro sees only the 4 V, so it will be fine.  You do have to make sure you observe proper spacing, get a resistor rated for the voltage, consider the output impedance of the divider, and make sure the resistors can handle the power dissipation.  However, that's no different than if you were measuring 20 V, just that some of the numbers are higher.

In some cases it may be convenient to use components with isolation to transfer signals around this circuit.  But, that is not for the isolation itself but to allow for arbitrary common mode offset between the input and output sections.