You cannot mix effects and collapse transformations. There is no way to get what you want using this methodology. You need to make up your mind how, when and where you create the reflection and work accordingly.
I'm with Mylenium on this. Your concept is flawed and you're making it far too difficult. Just put the anchor point at the bottom of your reflection then scale it to minus 100 in y [100, -100] then make both layers 3D and set up a gradient track matte on the reflection layer.
Great! At least I know not to spent my time in a wrong direction.
- Do I need to enable "Collapse Transformations" in the final rendering Comp in order to keep "Continuously Rasterize" settings within the nested PreComps enabled (for illustrator files rendering sharp). I have a few nested preComps and originally activated "Continuously Rasterize" throughout the project in all of them.
- "How" to create reflections seem clear from your comment. Do not use any effects but rather create a copy of a layer I would like to have a reflection of and scale it to -100. "When" seems to be a mystery. Should I apply reflection in the very first preComp or very last or the one where I create all the major animation for my graphics?
On your CR question - depends. It's important to understand what CR/CT does and how one effects another and the effect layer styles and adjustment layers have on the entire render process.
As far as casting a simple shadow take a look at this CS6 project. (Note dropbox is going to add a .txt to the .aep extension. You'll just have to delete it to open the project)