1. Is it correct that the preview on the LCD is of the JPG and all the associated Canon in-camera processing settings that are set by me or Canon defaults?
The review image on the LCD uses the JPG image created based on the settings (Picture Style, ALO, etc.) that you have chosen.
2. If you shoot RAW only, is the JPG preview the same as the JPG preview with RAW+JPG?
Yes, it's still using the same JPG preview. There is actually a preview JPG image embedded in the RAW file, even when shooting RAW only. It's worth noting that the histogram you see on the image review is also generated from the JPG preview image, so if you make exposure changes based on that histogram, your in-camera settings can actually indirectly affect even your RAW images.
3. If one wants to reply on PP software such as LR, what settings in camera should be enabled, disabled, etc? I realize that they can all be changed in PP but what is the best way to view the preview and see it based on the exposure you just shot it at?
If you're using 3rd party software (i.e. not DPP), it doesn't matter what settings you choose - LR, Aperture, DxO, etc., none of them recognize any of the Canon-specific metadata tags (with some exceptions, such as AF point, etc.). But, none of the image affecting settings (Picture Style, ALO, peripheral illumination correction, etc.). One notable exception is highlight tone priority, which is actually baked into the RAW data.
Different PP programs (ACR/LR, Aperture, DxO, etc.) have different default settings. I suppose you could shoot a color test pattern of some sort (e.g. an X-rite Color Checker Passport, Gretag-Macbeth color chart, printout from the web, etc.), process that using the defaults for your PP program, then use Canon's Picture Style Editor to create a picture style that most closely approximates the default output from your chosen RAW converter.
4. Is it ever ok to rely on the in-camera processing for important work like portrait shots, landscapes, etc? I'm excluding situations like sports or possibly weddings where possibly thousands of shots are taken.
Sure, depending on your expectations and those of your clients, if applicable. If your picture is well-exposed, has the right color temperature setting, and is otherwise pretty much how you want it, then processing a RAW image may be spending time you don't need to spend. But...unless you can be sure you're absolutely going to get it right in camera, or can go back and reshoot if you don't, RAW gives you much more flexibility to correct problems.