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For what it's worth, you can do something similar to the top image today by placing a Concatenate Strings primitive on the 1D array. It will turn it into a single string.
I like this. Out of interest, how would you expect it to work with, say, a 1D array of strings? Would you want the array elements (whole strings) indexed within the loop (which is how it would work now), or would you want the indexing to iteratively pick out the first character of each string element?
With reference to tst's comment (nice tip by the way, I didn't know that) you could then do what you want on the input side with a String To Array Of Single-Character Strings VI (easy enough to create) then just use the normal auto-indexing. I appreciate the suggested idea is neater but it is one more bit of 'hidden' behaviour for new users to learn, and experienced users to have to check when debugging, or examining someone else's code - it's even more hidden than array indexing because the wire doesn't change appearance as it passes through the terminal.