Thank you to all who helped.... the FBX was worth knowing. (I'd noticed that myself but didn't really consider it?) And Yes! The Lateral partitioning tool is the right one for the job. To save further strugglers with this problem... there is a basic tutorial available, then you just have to jump right in. Hint: It's a bit like untangling a ball of wool. You have to start somewhere, and gradually you figure it out. It's very time consuming but worth it. It's a very powerful tool, and I'm glad I found it! Thanks again everybody!..

iClone 7.93/8.01, 6.0 Pro, 5.5 Pro, 3DXchange Pro, Character Creator 3/4, CrazyTalk Animator 2.5 Pro

Homebuilt computer - Windows10, 13th Gen Intel(R) Core(TM) i9-13900K   3.00 GHz Nvidia RTX 3090 Graphics, 64GB DDR5 RAM,  MS-7306 motherboard, 12 terabytes of disk space, 28” monitor and Optoma UJHD65-LV projector. 

Update

Thanks guys! That gives me a couple of different avenues to try, rather than going round in circles on my own... much appreciated!

iClone 7.93/8.01, 6.0 Pro, 5.5 Pro, 3DXchange Pro, Character Creator 3/4, CrazyTalk Animator 2.5 Pro

Homebuilt computer - Windows10, 13th Gen Intel(R) Core(TM) i9-13900K   3.00 GHz Nvidia RTX 3090 Graphics, 64GB DDR5 RAM,  MS-7306 motherboard, 12 terabytes of disk space, 28” monitor and Optoma UJHD65-LV projector. 

Update

And a word of advise...
Do not export OBJ out of DAZ for HD characters. It maintains LOD levels internally and OBJ export always gives an HD version - extremely dense.
Left is OBJ export - 4 times more poly than FBX on the right.



Export FBX instead. You may even import DAZ character with all cloth as Humanoid (pose it first in DAZ as Rampa advised), detach all cloth and fit to CC character.

Another thing. Before running Transfer Skin weight, sculpt/edit mesh in groin and underarms areas to be as close to the body as possible.
Baggy cloth in those areas is very difficult to rig and perfect for all poses.
Specially with dense mesh where Smooth weight paint brush is practically stalling and impossible to use (something RL has to address sooner or later).

That is cross-weighting happening because of the close proximity in those locations. Lateral Partition is the correct tool. It also has an arms isolation feature.
https://manual.reallusion.com/Character-Creator-4/Content/ENU/4.0/08_Creating_Custom_Assets/Lateral_Partitioning.htm

You can often get it a lot better by just posing in DAZ differently. Put the upper body in a T-pose, or a slight Y-pose. If wearing pants, put the lower body in a A-pose. Dresses can stay in T-pose. If you pose your character that way in DAZ and then export your FBX, it will have much less, if any, cross-weighting.

Thanks yep koo, but my problem is removing the distortions to the clothing mesh... here are some examples...

iClone 7.93/8.01, 6.0 Pro, 5.5 Pro, 3DXchange Pro, Character Creator 3/4, CrazyTalk Animator 2.5 Pro

Homebuilt computer - Windows10, 13th Gen Intel(R) Core(TM) i9-13900K   3.00 GHz Nvidia RTX 3090 Graphics, 64GB DDR5 RAM,  MS-7306 motherboard, 12 terabytes of disk space, 28” monitor and Optoma UJHD65-LV projector. 

Update

I don't know if it will be useful to you, I prepared a video about this last year. Maybe it'll help.




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https://www.youtube.com/yepkoo
https://dev.epicgames.com/community/profile/bxvo/Yepkoo#learning

CC4 won't import DAZ Files at the moment, so I've resorted to importing as obj.s. No problems. However, this is a problem I've had with all DAZ clothing. Tearing under the arms and between the legs. I've tried using the lateral positioning tool, with no results. Can anyone help solve this incredibly frustrating problem. Any help would be better than what I've got!..

iClone 7.93/8.01, 6.0 Pro, 5.5 Pro, 3DXchange Pro, Character Creator 3/4, CrazyTalk Animator 2.5 Pro

Homebuilt computer - Windows10, 13th Gen Intel(R) Core(TM) i9-13900K   3.00 GHz Nvidia RTX 3090 Graphics, 64GB DDR5 RAM,  MS-7306 motherboard, 12 terabytes of disk space, 28” monitor and Optoma UJHD65-LV projector. 

Update