How much work is it to convert these to object_id while at it instead of char
*sha1?
(I think we really dislike introducing new sha1 based code; If it doesn't sound
easy maybe we can have a static inline wrapper here that just converts oid to
sha1 and then calls this function?)

I have made this change in my latest patch series with 0ac48f3af7 ("read-cache: make_cache_entry should take object_id struct", 2018-06-22)

Is it possible to line break these functions (c.f. refs.h which I think has one of the
best styles in the git project. It has long parameter lists, but still manages to stay
below a reasonable line length) ?

quoted

+extern struct cache_entry *make_empty_cache_entry(struct index_state
+*istate, size_t name_len);

I have formatted the function declarations to break them up

quoted

+
+/*
+ * Create a cache_entry that is not intended to be added to an index.
+ * Caller is responsible for discarding the cache_entry
+ * with `discard_cache_entry`.
+ */
+extern struct cache_entry *make_transient_cache_entry(unsigned int
+mode, const unsigned char *sha1, const char *path, int stage); extern
+struct cache_entry *make_empty_transient_cache_entry(size_t
+name_len);
+
+/*
+ * Discard cache entry.
+ */
+void discard_cache_entry(struct cache_entry *ce);

Please be consistent in the use of the extern keyword and omit them at all times
here and above.

The header file is a bit inconsistent overall, but I switched my declarations to not use the extern keyword.