In general practice, you want to build your base image as a VM, so that in the future if you want to drop that image onto other models, you can without worrying about driver issues.
Not all companies are the same. There may be some things you want to change during your Capture.
For me, I let MDT merely convert my VM to a WIM. I don't want MDT doing anything to it, just convert it.
The changes I make are on the Deploy side. I take that clean WIM image, put it in my Deploy Task and that's where I make all of my modifications. The original Captured image always remains intact.
I assume when you're talking about recreating your TS and not modifying anything, that you mean the Capture Task. For your first question, creating a VM is the same as making an image from a physical pc. Start with your OS, add a few things if you'd like...and capture it. There are other steps such as making a checkpoint before you capture the VM so you can revert back to it if needed.
The only concern I see in your setup is that sysprep needs to run, regardless. It strips out the MAC so each pc gets a new one. Otherwise, 100 computers will appear as one pc in your whole directory, so let sysprep strip off the MAC.
There are several sites that are very detailed step-by-step procedures in using a VM and a Capture/Sysprep Task and a Deploy Task. I can be of more assistance if needed. But for your current situation, using a physical pc isn't terrible, it just limits the kinds of pc's that image can go onto.
I'm not sure what you mean by settings on your MDT server vs what's in the CustomSettings or Bootstrap files.