"The linking is as short and as succinct as it can be. Just normal navigation as far as I would say."
My concern is NOT with the normal side bar / top bar / footer navigation links.
My concern would instead be in-content links; in the middle of your text.
I think most are of the consensus that google treats links in the navigation areas differently than that which is in the body of your text.
"Didn't Matt Cutts say that internal linking was not an issue some time back?"
I think I remember something like that, but I think he also qualified saying something like, "In MOST cases it can't hurt you, but don't be spammy about it." (That is NOT an exact quote but I think that is the distillate of what he said.)
It was, if I remember correctly, a typical Matt Cutts quote - meaning it had just about zero actionable information.
"I mean, where do you stop if that's the case?"
What is your level of risk?
Penguin 2.0 discovered more unnatural links than Penguin 1.0.
I will bet that Penguin 3.0 will discover even more than 2.0
John Mueller and Matt Cutts have both said that in the case of algorithmic demotions (i.e., Penguin and Panda) it can take MONTH for rankings to improve.