This is a residence. In a residence I regard it to be "poor practice" to place a 35amp breaker on #12 wire. I would use #8 wire.
Why do you say this is a "poor practice"? The breaker is only provding short circuit and ground fault protection for this circuit. The overload protection is provided by the AC unit. Under a short circuit or ground fault, there will be no difference in the trip times or the current required to open the breaker for all breaker sizes between 15 and 60 amps.
The basic NEC rules would require a #8 on a 35 amp OCPD, but motor, refirgeration and some other circuits are not required to comply wiht the basic rule. Also I don't think the #12 would increase the flicker or dimming effect on the lights. It may increase the lenght of time that they dim, but should also reduce the amount of dimming.
Dimming is caused by the voltage drop on the service conducotors. Smaller wire will limit the current and reduce the voltage drop.
Yes the code is a minimum and you can exceed the minimum. The original question asked for the mimimum conductors that are "required" for the circuit.