No question is a dumb question
This was a good question and I've actually had to go back and re-read the fee's PDS for my travel card. To make this easy we'll stick with the Euro to Swiss Francs example. First of all I did try to use only MasterCard ATM's and this wasn't hard as pretty much every ATM over there is affiliated with MasterCard so I think I may have been slapped maybe once on my whole 56 days over there with a withdrawal fee.
In regards to the currency conversion fee I don't remember getting charged the 5.95% and that didn't come through on my statements anywhere. What would happen is when I was at a Swiss ATM it would just use the actual conversion rate between Euro and Swiss Franc on that day and then withdraw it from my loaded Euro on my card so I was just like withdrawing Euro. It would show me how much of my Euro would be Swiss Franc and confirm that the spot rate was okay. I can't see anywhere that I was charged the 5.95% for these conversions but I can't give you a definite answer for that as that may have been included but once again, looking at my statements I can't see it was.
Some borders (like crossing into Switzerland) we didn't even stop and just drove through so we didn't have a chance to go to a currency conversion store as I would have withdrawn Euro and then converted the cash into Swiss Francs. I'm not 100% sure what you mean about being better off doing smaller conversions at borders. I would try to see what would be planned in each upcoming city/country and try to have ample cash to cover my time in the country/city before hand so I didn't have to spend time looking for currency conversion shops or ATM's in the city's. I preferred to do relatively big conversions so I didn't have to keep going back and get more money. You will always be hit with the conversion spot rate on the day you are converting you money and you just have to be lucky with those rates on the day.
To answer your next question about being able to use your credit card instead of cash I guess depends on your cards term and conditions. I'm not sure but some cards like 28 degrees master card may (but I'm not sure) have a limit to how many uses per month before they charge you for transactions or something crazy like that. They were very vague on the 28 degrees website from my brief look so it would probably be best to call them up and get a straight answer. Thinking about it though you should be able to pay for entry into most museums, attractions, food vendors and souvenirs.
As the travel cards usually only state about withdrawal fees from ATM'S I don't know what the go is for paying for things with your credit card and whether there might be a credit card surcharge for each transaction in other countries. I found using cash a lot easier as you end up eating with friends all the time and splitting the bill and paying tips is easiest when you have cash as well as some attractions don't accept credit card and you need to pay cash.
I can't really remember but from memory I think a lot of little stores and trinket shops may not have had card machines either but I didn't do a heap of shopping (I was out seeing the sights) so I could be wrong. It was always handy to have some cash to pay for train/bus tickets or grab and ice cream on those hot days. Places also might have credit card limits (e.g. you need to spend at least 10-15 Euro to use your card) so you may have to be careful with that. I personally preferred cash as that seemed a lot easier (and fun to use different notes and coins) and I was a bit paranoid using my credit card all over Europe in case someone took a copy of it and I didn't notice. Then you could be in a lot of trouble.
From memory you have to pay for all the Topdeck optional activities in cash prior to the event. You would usually pay the tour leader on your drive days on the bus and they would come around and get number and cash from people who would want to do the optional's for the next couple of days.
I guess it will come down to whether you feel confident enough to use your credit card for most things and so long as you have some spare cash with you for emergencies then you should be fine. It really comes down to personal preference and I preferred using cash for most things as I knew that vendors would also accept that. I did use my card for the occasional larger purchase like special Schnapps' from Vienna and renting a motor bike on Mykonos but I used cash for pretty much everything else.
Looking above I have again wrote a fair bit so if anything doesn't make sense or you want clarification on anything I said, or just have more questions, just let me know. I hope that helps Tira.