I. There's nothing wrong with your imagination. Both motorized and mountain infantry are transported by unarmored trucks, and unloaded as footsoldiers prior to or when encountering combat, whereas Armored Infantries or LHMIs can fight alongside their IFV or Mengshi. The differene between the former two is that mountain infantry is expected to maneuver across mountainous terrains, therefore some of their weapons and equipments is required to be highly mobile by the means of 1) being mounted on high-mobility vehicles such as Shanmao ATV or 3rd-Gen Mengshi; 2) having the ability to be disassembled and carried by men. As for motorized infantry, they can cope with anything that can be loaded on or towed by trucks.Actually I'm not clear on Chinese Motorized Infantry and Mountain Infantry. I only have vague imagination that Motorized Infantry ride on soft skinned trucks. For Mountain Infantry I have absolutely no idea.
Also, is there a separate Armored/Assault gun batallion at group army lvl that can be broken down into companies and attached to LCAB? That sounds like a solution to insufficient firepower of LCAB. AFAIK it's also being tried by US army for IBCT with it's new MPF.
II. No, and I agree that LCABs may be insufficient of direct fire.