Uh ok, shielding is a cable that has an outer layer of wire mesh or metal foil and that outer mesh is connected to ground, and this way it protects the inner wires from any outer external field which could cause signal interference. Look up "Faraday cage" and shielded cable. The cable shielding is only grounded to one side, preferably to the side closes to the psu. If its grounded at both sides it creates a ground loop which is not beneficial. Shielding is a must have on all signal lines, servo signal but also thermistors and endstops which run along other stepper and heater wiring which creates intereferences. This will probably solve your wobbling, and if it does then you wont need anything else further.
For a motor cap you can test in a reasonable range like 100-220-470uF cap between the +5v to Gnd which are connected to the servo, that is as close to the servo motor as possible. Check if you see any difference with or without this cap. This is for the power supplied to the servo and its sort of a capacitor for motor, which purpose is to help when the servo draws peaks of current. Again no cap on signal line.
Local 5v source means a 5v voltage regulator, (7805 or similar), which needs an input higher than 5v, so it can be supplied with 12v (not usb), and it outputs 5v. If you seach "7805 datasheet" you will find schematics in there. But hopefully shielding or at least a motor capacitor will solve your issues so you wont need to try patching in a local regulator.
For a motor cap you can test in a reasonable range like 100-220-470uF cap between the +5v to Gnd which are connected to the servo, that is as close to the servo motor as possible. Check if you see any difference with or without this cap. This is for the power supplied to the servo and its sort of a capacitor for motor, which purpose is to help when the servo draws peaks of current. Again no cap on signal line.
Local 5v source means a 5v voltage regulator, (7805 or similar), which needs an input higher than 5v, so it can be supplied with 12v (not usb), and it outputs 5v. If you seach "7805 datasheet" you will find schematics in there. But hopefully shielding or at least a motor capacitor will solve your issues so you wont need to try patching in a local regulator.