You do want to blow up (not deliberately though) this thing once though. If no prototype ever blows up before you start going into production, you never know some pieces of information you’d gave gotten from monitoring the failure process.
Once it is well-clear of the pad – blowing up is a lot less bad. But still, ideally they want it to make at as far through the flight plan as possible. If it blows up early in the flight, there's a lot of stuff that happens later they won't even get the chance to test this time around. Sure, they'll get the chance to test it next time around – but that'll be another delay in an already delayed project.
(This isn’t supposed to be a dig at SpaceX… just a factual statement. I find this risk-tolerant approach to be inspiring, actually.)
And knowing you have an issue is half the battle.
Similarly probably one regular camera in each tank and similar pressure and temperature sensing. With the engines, IIRC these are refined Raptors which don't have the "christmas tree" of instrumentation, so probably just pressure and temperature in all the key areas.