I would say that all dogs have faults, so you won't get a dog without faults; it's all a matter of degree. When Kris and I look at potential for breeding, we look at health as a first priority. We go back at least back to the grandparents, great grandparents are better. Doesn't help anyone if you have the perfect show dog and all the offspring are getting MDV at 1 year old (rather an extreme example, but you know what I'm getting at).
Next we look at structure, things like topline, head, earset, front and rear, etc. The very last thing we look at is coloring. Generally, coloring is not considered a major fault. The exception to this would be white on a ruby or B & T. All dogs will produce a "mismark" once in a while and that's not a reason to not breed. If, however, you have a dog that's producing all "mismarks" you may want to consider placing that dog. You mentioned bite specifically. I don't remember the exact wording of the breed standard on bite, but I think it gives you a little flexibility. I will say, though, that if you have a dog that has a bite that's off, it's an easy thing for a judge to pick on.
Lastly (my pet peeve), no trimming is allowed; the breed standard is very specific about that. And yet I see dogs in the ring all the time that HAVE to be trimmed because fur doesn't grow that perfectly. And the judges are putting those trimmed dogs up. A friend of ours in this area has put on a couple judges seminars on the Cavalier and her hope is that judges will become more aware of the breed standard.
There are other breeders on here that I'm sure will have some input for you also. Good luck on your showing and breeding.