You pose some of the most interesting questions I've seen here in a long time. This ought to develop into a great thread. For starters, I'd like to tackle one set of your questions that seem to be interrelated.
First, I think most of us feel like we need to go to great lengths in our dressing in order to overcome our masculine features. While some might be satisfied with something more akin to androgyny, the majority want to present as decidedly feminine, which requires a very thorough transformation, including very feminine clothing. Even then we barely pull it off, but to the extent we do, we love the trans-formative effect on our own appearance and the way we feel.
I think most CDers are also projecting what they find attractive about women, at least physically. We obviously love the female physique and appearance (even the gay CDs). We love your curvy body and your soft features and your sexiness, and we try as best we can to emulate that which we love. We are also communicating how much we love the way women's clothing (and hair and makeup and etc) plays up your beauty and sex appeal. Men are very visual creatures, so naturally we love styles that are revealing and flattering of the feminine form, and that accentuate the difference between the genders. This has always been and always will be true.
This of course begs the question, as you have touched upon, of what shapes our notion(s) of what constitutes feminine allure. To a great extent, our cultures shape our perceptions. For example, those of us of a certain age grew up around women who were extremely feminine in the way they dressed and behaved, so it's only natural for us to relate to such styles. Whether it was pencil skirts or petticoats or mini skirts or hot pants or hiphuggers, we tend to relate viscerally to the styles that were in vogue as we came of age and started chasing girls. (Some of us "outgrow" that as we age, some of us don't.)
I think, too, that individuals can influence us very strongly. It might be a celebrity or a sex symbol or a person from our own lives. The mini-skirted girls of my high school and college days forever burned that preference into my brain and libido. And, I often notice that a woman in my life later on profoundly influenced my perception of "female" -- both in appearance and behavior -- and shaped to some degree my own self-perception as a CD.
And as I've touched on here and there, there is the undeniable sexuality of dressing. CDing doesn't always have to be about sex, but that's how most of us got started and for most of us there will always be an element of sexuality about dressing. Not only do we find a woman dressed femininely very stimulating, we have discovered how good it feels to actually wear those sort of clothes. It's just so much more sensuous than guy clothes, and we love the way it makes our legs or whatever look. It's a turn-on to see, and a turn-on to experience.