2) This calculation process is called transformation is extremely taxing to most CPUs.
Question 2: Is it because the CPU cannot process the address of the data quickly per frame? Does it lead to a slow frame-rate in the game?
This one is actually still true.
Matrix-matrix multiply and matrix-vector multiply are a big cost. A few really smart math geeks have greatly reduced the costs, and some really smart hardware geeks have moved a portion of the cost over to the graphics card rather than the CPU. However, the operations are not free and they are the most common basic functions used in graphics and physics and other systems.
Done poorly a game can still overload the CPU with badly-written math operations. It is a known concern. Faster processors and good libraries can help reduce and mitigate the concern, but it is still something you will see quite visibly on profiling numbers.
A simple naive matrix multiplication, a 4x4 multiplied by another 4x4, is rather costly. Multiply each row by each column (using a dot product) to compute each one of the 16 necessary results. That is 64 floating point multiplications and 48 floating point additions. While an individual matrix multiply isn't overly taxing, doing many of them quickly reaches an unacceptable cost.
With a little bit of math magic and some SIMD instructions you can reduce it to the oft-cited code snippet of 16 multiplications, 12 additions, and 16 "shuffles" that let you reuse some of the intermediate results. It ends up about 5x to 6x faster depending on implementation details of the naive implementation. I'm not sure where it came from or what the proper name for it is, but it has been floating around the web for about a decade now. There are many similar speedy specialized algorithms for various vector-matrix operations for both column-based and row-based vectors.
While that is a reduction in the number of steps, the cost of matrix multiply is still one of the more costly low-level operations you can do. Graphics operations rely heavily on it. Every time you move or position something in 3D space you need to run a series of matrix multiplies all the way through that portion of your scene. You've got the Model or World, the View, and the Projection matrices that ultimately needs to be pushed out and multiplied to every pixel that gets rendered. You'll need to do quite a few of those matrix multiplies on the CPU, but fortunately you can pass the pre-multiplied values out to the GPU and allow the card with its specialized hardware to do the rendering and heavy lifting.
Physics relies heavily on it, every time you move a physics object you also rely heavily on this math Much like the graphics APIs, there are physics libraries (e.g. PhysX) that take advantage of hardware to do the more costly parts. Most physics simulations work on bigger primitives rather than point clouds so they often require less total matrix operations, but it can still require a hefty portion of the CPU budget.