How do I choose the right kind of wire?

New light fixtures or old ones?

You can install it Kevin. It will be fine. I am an Electrician snd have seen these 100s of times, even installed two lamps in my own office that had 'em. Just be sure to use about 2 inches of electrical tape around the insulations beneath where you tighten the wire nuts before you tighten on the Wire Nuts. This will create an airtight seal in ths nut that cannot catch fire, just likd translucent plastic crimping caps do. Granted you are better off just buying a pack of 25 of thd crimping caps, but really Electrical tape and wire nuts do the same job: Creating an Airtight bubble around the Connection.

Not in any of my houses. My 1926 home still had some aluminum wire remaining when my parents purchased it in the early 60's. My dad rewired the entire house. Years later I upgraded the panel and installed more circuits and outlets. It is a fine line and a matter of opinion.

http://www.ismyhomesafe.ca/aluminum-wiring-repair/

https://www.carsondunlop.com/training/resources/the-true-story-behind-aluminum-wiring-part-one/

https://www.nachi.org/aluminum-wiring.htm

https://en.m.wikipedia.org/wiki/Aluminum_building_wiring

I know what code is in my area and what building inspectors will say and approve. Most rewire just for insurance purposes as the rate is higher fo older homes that were never brought up to current code. May be a different scenario where you live.