Installing wheel w/o coldsetting frame.
 

The title pretty much says it all. Can I install a 120mm wheel in 126mm dropouts without coldsetting the frame to 120mm? You know, the dropouts will just be pushed in and then pop back when I take the wheel out at some point in the future. Is this OK?

I've thought about adjusting my old Peugeot to 9 or 10 speed.
Now, my Peugeot would require a wider adjustment than your bike.
Looking at the old ruler, a difference of 6mm doesn't seem very critical. I don't think you would hurt anything if you tried this.
Be prepared to be accurate when you set your quick-release, i.e. make sure your wheel is running in the correct line. Also, your RD may require a little tweeking. I don't think your chain will mind, be more aware of cross-chaining though.

I am thinking that if you get a longer axle and put 3 mm spacers on each side of the hub, then it should work fine without the need for cold setting.

From everything I've read about it, it's the BIG jumps that need cold-setting, like going from126 to 135mm. I'm pretty sure it'll be okay.

I've been told just squeezing the frame in works out alright, but i have a 120 IRO hub inside 126 dropouts with spacers on each side. I'm still trying to work out a perfect chainline, but I've ridden it all winter with no major problems.

I would go ahead and bend (oops sorry, "cold-set") the dropouts. It's really not a big deal. Take it to a good mechanic, shouldnt cost much. Your frame is actually stronger if you don't have a continual stressor (caveat, I'm no metallurgist or Engineer, this is what I've read or heard from framebuilders) from stays that are spread too far. The process of cold setting is straightforward, the tricky part is bending both stays equally. I've uses a long threaded rod with 2 large nuts and washers on each end. Stick the rod in the dropout and put the washers on the outside, then the nuts. Screw down each side equally, a little at a time. Go slow, you will have to actually make the spacing smaller than your required width because of the mememory ("spring") Do a little at a time, loosen to check, then continue until you are about 1 mm too wide, then stop. Patience. You can check alignment with a gauge, or using Sheldon Browns string around the seadtstay method. Not so hard, really.