Playing around on that website, it looks like I can go with even smaller wire if I run three hot wires and even smaller if I run four hot wires. Is there a cost savings with the smaller wires or am I running into issues by going with more then two hot wires?
There is a cost savings, to a point. Things you should know when running parallel sets:
1) Terminations: You've got to terminate those multiple wires somehow into the breaker lug at each end. When you've "upped" the number of cable or their size for voltage drop you're now trying to, for example, put a 400 amp cable in a 200amp lug, or 2-200amp cables into 1 lug. This may require an additional "power terminal block" (and enclosure) to at each end to land the multiple or oversized cables. Then you'd have just a short 200 amp (normal sized) jumper cable from the power block to the panel breaker at each end.
2) If you put each parallel set of cables in it's own conduit no problem, but when you add "more than 3 current carrying conductors" to a single conduit, the cables ampacity has to be derated (by Code). More than 3 current carrying conductors = 80%, more than 6 = 70%, more than 9=50%, etc... - However this is ok if you, for example, upsized your 200 amp circuit to 400 amps of cable to compensate for voltage drop and but then had to derate the cable by 50% back to 200A (understand? -The 200 amp breaker is still protecting the (derated) 200Amps of cable.)
3) If your installing parallel cables in parallel conduit runs for a 200amp feeder, by code each conduit run requires a full sized ground conductor (i.e. sized for a 200 amp circuit: #6 Cu or #4 Al). If your installing individual wires that's no problem, but if your installing cables in parallel conduits , and their individual amapacty is less than 200 amps, they won't be manufactured with a ground conductor suitable for a 200 amp circuit (i.e. (#6 Cu or #4 Al gnd).
Eddie