No real secret...use the work flow as detailed earlier.
1. Created CC Cloth item using the usual work flow (in my case in Anim8or and then rigged in Blender)
2. In CC added clothing from step 1 to CC character
3. Pushed CC character to iC7
4. Activated Morph Creator on the CC character
5. Selected just the clothing and used Morph Creator's Export to export (as OBJ) the selected item (do no include the character)
6. Created my morph based on that Morph Creator reference obtained in step 5
7. Applied morph created in step 6 in Morph Creator
8. Pushed character back to CC to save clothing. Note: In CC the morphs won't show up but they are still retained (saved)
I believe that getting the OBJ "reference" from Morph Creator (and using that to create the morph) was the trick that allowed me to avoid the distortion that I was getting earlier and also any shifts.
Couple of things to note:
1. The morphs should be basically limited to changes along the same bones (as was mentioned earlier) because of the weight painting
2. When morphing, for example, the length it is likely that you will get poke-through at some values. To address this I created a morph that is a slightly larger version of my clothing and called it a Fit Adjustment. When poke through occurs, typically it can be eliminated by applying a bit of the Fit Adjustment morph. You can see this idea at the end of the following video:
https://youtu.be/BDhaWs0rzQ8
"We often compare ourselves to the U.S. and often they come out the best, but they only have the right to bear arms while we have the right to bare breasts"
Bowser and Blue, Busting The Breast