Is this that silky smooth performance type fabric, or just an ordinary cotton T-shirt?

Just an ordinary cotton shirt NOT silky performance type of fabric at all.

No idea what your sizes actually mean on a body?

I ordered a M for my daughter and it fit as a size 8 would normally fit. I have ordered size S in the past and it fits as a size 6 would fit.

What size does a medium equal too? Would it be a 7-8?

Gildan sizes are usually Youth S = 6/8, M=10/12, L = 14/16. I ordered the size large in this particular shirt listing and it was very small- about 2 inches smaller than a typical youth large in Gildan. If you are wanting a 7/8, I would suggest sizing up to the medium.

is this shirt pre washed?

Not pre-washed but they are pre-shrunk. Been using this brand for about nine years in our printing business and have never had a negative review on it.