I have wood done like you are talking about and have had no issues with spills causing any problem. As far as water leaks I have a crawl space and we installed emergency drains in the island and cabinet were the water enters. The only real risk I am running is if something bust on the fridge and I have a major water leak. All we had to do is put in a wood lip at the cabinet / islands edge and caulk the seems. This makes it work like a catch pan for a drain we installed in the bottom thru to the crawl space. To me it is a lot easier to dry my crawl space than to replace the flooring.
For my tile installs I used plywood screwed to floor joist and then cement board screwed to the plywood. This made a solid area so that I have had no settling or cracking from flexing.
Another thought I had on laying wood in kitchens when I done mine is you can lay unfinished wood. Then finish the wood sealing it leaving no seems for leaks before installing the cabinets.
PS note the pic attached is part of my actual Kitchen with a rendering of what it would look like with a few changes my wife wants to make (like the blue island). LOL
