[Canadian Man]

i would not put the ballast where the light bulb would be, as the ballast casing will rust as well and same problem had. i mount my ballst on the back or top of my hoods and have the wires going throught holes in the hood. i use the cheep endcaps (same as your shop lights) and have no problems with them. the only exposed part of my wires are where they plug into the end cap, so not alot of wire exposed. and yes ground the ballast case. thats all you need to do.. i dont have my wire nuts in the hood they are on the outside but if they were on the inside you could put a dab of silicone in the nut or wrap it with black elec tape.
cheers