I am really confused how to have Collision Shapes work with clothes without being poking through??.. May someone help please.

If you are talking about dresses and skirts, they have a weight map also that you can adjust. The darker the weight map the less
flowing of the dress and skirt. You have to have a balance between the two. With collision shapes, the red part has to just poke through 
the skin to block the clothing from poking through. I hope that helps you. I am no expert on this. This works for me.
You can adjust the collision shapes by pressing W to move, E to rotate and R to increase or decrease.
Good luck.76% of original size (was 661x19) - Click to enlarge76% of original size (was 661x19) - Click to enlarge76% of original size (was 661x19) - Click to enlarge76% of original size (was 661x19) - Click to enlarge

Michael, thank you so much for your guidance and your help, these are very detailed information well illustrated. The only thing i am still struggling with is how to prevent an active shape from poking through the clothes.. You can see the following picture as an example of my problem :
76% of original size (was 661x19) - Click to enlarge

Wooow!!! This is exactly what I was asking for!! You made my day!! Thank you so much I am very greatful for your fast help, Michael.