After some recent testing there are 2 things to make sure this works:
. Make sure the bone GC is parenting to (like the head) has "Deform Bones" turned on.
. And make sure there's no constraints on the bones themselves before applying like for ik on hair as an example.

Alright, I've been finding stuff with experimentation for this.

. Make sure your active pose mode matches rest pose when applying GC so the boxes are baked where you expect. Can't just click the rest pose button. 

. DON'T have any modifiers on the bone constraints tab for when you add GC. It glitches up the connection. If you have a specific spot like a scarf grabbed, bake that animation and THEN use GC. Constraints added after DO work but GC influence must be set to zero. It still glitches up GC until deleted though. 

. Blender at higher frames in the timeline or in complex scenes usually requires baking the physics for things to look proper. Thankfully, it's extremely fast for GC. 

. Last one on baking a cache into animation keyframes. It's really powerful as you can reset the motion of the GC physics at any range and smoothly blend in and out with ik influence. 

. DON'T have your scene too large or small like matching Blender character scale to Unreal Engine x100 scene scale compared to Blender. Blender physics requires more work and GC hates it too. 

Yes! Just weight paint the boxes a bit more on the pin vertex group to make the physics stiff enough to merely jiggle instead of dangle.

To my surprise it hasn't been that bad as there's always some part of the box that catches the in-between sections. There have been moments where boxes get sucked inside collision, but I found out that my collision quality was SUPER low which allowed that to happen. Even then, I can change the shape of a box to adjust for any issues.

This is based on the cloth physics setup. Now i'm not really good at adjusting for specific things but the leather/cotton preset got me pretty far. Sometimes if things don't work out, I change the bending model from angular to linear. If things REALLY don't work out, but the rest of the physics in the animation are, then I lower the ik influence of the affected bones and add some manual animation til it stabilizes! Then raise the ik influence right back up again.

Well you can actually shape the collision boxes however you want into new shapes after they're baked! They're merely connected to the wire at each vertex along the bone chain and act as 1 whole cloth mesh for general collision.