Both are required,
You should rig the cape to allow animation to pose it as required and then cloth simulation is done on top of this using the rigged result cape as a goal mesh for its simulation....

I wouldn't do this, it's making the render much heavier for no real good reason, just render clouds and glass separately and comp together?

If you really really want to do this then you should...

Convert to the polys to VDB volumes and render it as a volume with scattering.
Did this to make the snow in this sequence:
https://www.youtube.com/watch?v=oOjuh9yzePA

I mean its totally possible but can you explain what you are doing and why?
If this is the entirety of the scene you are working on then i'd just stop rotation the object by hand as doing a rig...

Hey so lots of questions!
I'll answer these in a generic sense rather than maya specific for the most part, i'll mention a few approaches used to achive the kind of effects you are after and why as...

What version of maya are you using, this sounds like old problems with older versions of maya.

I don't know if the instancer can instance other instance object. Check the documentation to check this. The duplicate special is much simper in that it creates transforms who share a single shape...

Just make the proxy by hand, it should be single sided ( thickness is a paintable attribute ) and made of clean quads. There is no automatic way to compute this with maya.

The wrap deformer shoudl...

Generally you don't simulate the same geometry as the render mesh. Create a proxy version of the cloth or object you're trying to simulate (cloth simulation is in nCloth is sensetive to topology and...

Yup, to render and uncached simulation properly it will basically have to simulate and dump the simulation state into each render instruction file (which is the same as caching it but you can't get...