I'm a vegetarian for ethical reasons, but have always considered wool to be fair game. The sheep is shorn, and frolics off unharmed. What's the guilt aspect? Would like to reassess my position given whatever info you can share.
I think the life experience of farmed sheep tends overall to be a little milder than wild mountain goats, although they are herded up several times a year which they don't much like - they are bred to be quite cool. Most seriously their lambs are separated and sent to slaughter, and eventually the adults are too if they don't fall ill outside. The slaughter operation is the most problematic and the stress could be reduced alot if it could be arranged on site. In the wild predation on herds and flocks is routinely very traumatic as well.
My major concern with sheep farming is that it is done at an intensity which keeps their ranges quite barren of flora. Tree and bush saplings and many native plants cant withstand grazing levels so ranges which could reforest and be more fertile wild or semi-wild habitats, end up tundra-like despite having much more potential for diversity, conservation or sustainable productivity.