Concatenate specific files into one single file

No cat will not buffer all the files before it starts writing out.

However if you have a large number of files you can run into an issue with the number of arguments passed to cat. By default the linux kernel only allows a fixed number of arguments to be passed to any program (I can't remember how to get the value, but its a few thousand in most cases).
To solve this issue you can do something like this instead:

find -mindepth 2 -maxdepth 2 -type f -exec cat {} \; > bigtextfile.txt

This will basically call cat separately for each and every file found by find.

With links, I'm afraid, this will not be possible. However, you could use a named pipe. Example:

# create some dummy files
echo alpha >a
echo beta  >b
echo gamma >c

# create named pipe
mkfifo allfiles

# concatenate files into pipe
cat a b c >allfiles

The last call will block until some process reads from the pipe and then exit. For a continuous operation one can use a loop, which waits for a process to read and starts over again.

while true; do
  cat a b c >allfiles
done