Replacing oven element
Your insulation on the wire may touch the element and melt back but I have never seen it burn. The big deal to watch out for is no loose wires that could touch the side of the oven. That could cause an arc and damage both the wire and oven. If the wire is covered (with just a few strands of the insulation loose) I would use it. 

Remember the first time you heat it up don't put any food in as the element needs to outgass anything that may still be on it from the production process. After 5 minutes at 350 air out the oven and you should be good to go.