Question : Best LAN Network Switch Design?

I am looking to redesign the connections between my layer 2 LAN network switches to optimise traffic and performance. We recently consolidated our servers so have a virtual infrastructure which is working really well but I remain unconvinced that our layer 2 switches are correctly connected to provide us with the best platform possible. This question is really so I can find out how best to connect all the switches and provide a solid, reliable backbone. Configuration:

2 X ESX 4.0 Hosts (Server VMs distributed evenly by resources)
Each host has 10 NICs (2 for Service Console, 3 for VMs, 2 for iSCSI VMkernel port & the rest are used for other networks such as test and adsl)
All Service Console, VM & iSCSI NIC connections are distributed between 2  Dell PowerConnect 5448 layer 2 gigabit switches for redundancy. I have not yet optimised these 2 switches for iSCSI traffic but I plan to possibly create VLans on both switches for iSCSI traffic so I can optimise and isolate it.

These 2 PC 5448 switches are only connected together by a single cat6 cable but I am contemplating using link aggregate to increase the link between the 2 (not sure I even need to do this though?)

The next question is how to connect these 2 switches to the other 4 PC 5448 switches that client machines connect to? Currently, both of t 5448 switches are linked together with single cat5e cables in this configuration:

Switch 1 > Switch 2
Switch 2 > Switch 3
Switch 3 > Switch 4

I am worried that this configuration will be creating loops in the network and need some advice on how best to connect all the switches together for best network performance for clients and servers as well as optimising the iSCSI traffic.

Last question is which switch to connect firewall into for internet connectivity, should it be where the servers are? Full network config:

2 X ESX 4.0 Hosts (Dell PE2950)
1 X iSCSI SAN with dual controllers and dual ports (Dell PV MD3000i)
6 X Layer 2 Gigabit Switches (Dell PC 5448)
1 X Watchguard Firebox X550e Firewall

I hope this explanation is easy enough to understand :)

Answer : Best LAN Network Switch Design?

there is one disadvantage of the flat design to point out. i forgot to tell:

if your switch 3 goes down, your network is devided in two parts. switch 4 is disconnected from the rest.
a hirarchical design with redundant mainswitches can prevent this
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