Answer to Question 1
Both involve cross-dressing, but the transvestite does it for sexual pleasure. The transvestite feels he is male and doesn't want to change genders. People with gender dysphoria believe they are the opposite gender and cross-dress to feel more appropriate. They typically wish to change genders.
Answer to Question 2
A delusion is a thought, a cognition, with no basis in reality. Common delusions involve believing that one's actions or thoughts are being controlled by some external force, that one's thoughts are being broadcasted, and that thoughts are being inserted into one's mind. These delusions are all consistent with the disorganized thoughts commonly seen in schizophrenia.
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