do i need an extra capacitor to handle the second pair of registers?
You can connect as many 74HC595 chips as you want! But you will run into limitations due to complexity, power consumption and slow operation if you have very many chips connected. Remember that all the devices (LEDs, relays, light bulbs, whatever) will consume current when switched on, and that current will add up! Plus, with a bit-serial interface, it will take more time for each chip (8 bits) that you add to the system.
Does this mean I'm limited to a total of 70mA on all output pins
Yes, with those chips, it looks like you are limited to 70mA in total. As you say, just under 10mA per LED pin.
I love your pictures in the Make: pool on Flickr BTW!