Since there is heavy usage of DX API in this architecture, do we need to tune any parameters to make sure the performance is optimized for rendering the data, rules?

We are focusing on improving the performance of the DX API - this is something that is being addressed as part of the new fnx architecture. https://community.pega.com/knowledgebase/products/platform/project-fnx

We are currently using V1 DX API on one of our projects and all values sent back through the DX API come back as strings (Booleans, integers, etc.). Will V2 send the appropriate types through the endpoints?

The JSON structure in the DX API that is returned will be different between v2 and v1. You can try out the new V2 API in Pega 8.5. https://community.pega.com/knowledgebase/articles/user-experience/85/implementing-cosmos-react-ui-pega-platform

What's the difference between DX API v1 and v2?

v1 is available since 8.1 - it supports current rules (section, harness) - the v2 requires to run your application using the new React based UI rendering - it supports view and no longer the old rules.

The new React based runtime is available in 8.5 - The DX API v2 will continue to evolve in 8.6 with new functionality (recent, followers, child cases, etc.). DX API v2 will be less 'chatty' and will allow to get the new view directly from the response - the number of http requests required to render the case is greatly reduced in v2.

Will we receive the extended version of the starter pack for DX API's?

Yes, a new version compatible with DX v2 is coming soon on Pega Exchange.

With 8.5, we get DX API v2. But does v2 only applies to APIs in case category like for cases assignment etc. Are we still supposed to use v1 for all other categories like authentication, system management etc.?

Correct. DX API v2 uses a different service package. You can continue to use DX API v1 or the other endpoint in the 'api' service package.

With DX API I see duplicate calls going from client to server and multiple calls also. which will impact the performance. Are you going to fix those?

DX API v2 has greatly reduced the number of http requests required to display the next screen / assignment - now the response of a PATCH when you submit an assignment contains the next screen to render.