You need to go to Step 2 and select the strapless dress as the prop to clothifly.  Then the Calculate Drape function will be activated.  However, you have one more thing you must do-the collide against function--you need to select the V3  body parts eg body, hip, abdomen, chest, shoulders etc. or your dress will fall through everything.
 
Additionally, 15 frames is too small go for 30.

Now question # 2, you can use every one of those collison selections but  don't. Use the middle one-why because I just did it with the same dress you used- I got all of Svdl's dynamic stuff.

One more thing, make sure that your V3 is the default size model for frame one-you can adjust the proportions in frame 30 and the dress will adjust to it (within limits).

The folks that make the dynamic clothing use the base model as the standard to fit their clothes

Jan