So how can I get Zotero to just capitalize the 1st letter of the Book/journal article title and after the colon/sub-title?

You can use
text-case="sentence" in the csl code to do that - while I can explain to you how to do this for a specific style, as you'll have learned from the other threads on this, it's really not a good idea, as automatic sentence case does not deal correctly with proper nouns and (I believe) abbreviations.

Additionally, is there any other way for me to change the titles currently in my library without manually doing transform text one-by-one ?

no.

which style?

It's basically adding
text-case="sentence"
into the line, every time you see <text variable="title" .../>
or <text variable="container-title" .../>
http://www.zotero.org/support/csl_simple_edits

but note that your rationale for wanting this is flawed - if you do this, you'll have to correct these citations every time you use them in a document in the future. If you fix all titles into sentence case into Zotero, they'll always be correct in the future.
So you're really exchaning short-term time saving against long-term time saving and a lower frequency of errors.

What I'm describing above is how to fix the output style. It will not change the data in Zotero.
As I said, this will put all proper nouns into lowercase in your output.
You'll have to fix this every time you cite an item with a proper noun that should be capitalized in its title.

If you fix all titles into sentence case in your Zotero database itself, you'll ensure they're correct with a bit more work once. In the future they'll always be cited correctly, with and w/o proper nouns. Automatic conversion into title case in the output - if you need it for a style - works very well.

I'm sorry I'm being very brief about this - you said you had read a lot of threads and so I assumed the mechanics were well understood.

To do that you'll have to, for every title in your database and every new title you import, transform them into sentence case manually. Usually the fastest way to do that is to right-click, transform text and select "lowercase", then fix the first word and all proper nouns.

You might find it convenient to set the hidden preference "capitalize titles" to false:
http://www.zotero.org/support/hidden_prefs

this will get you sentence case from many databases, including library of Congress (it will also give you all caps from some, which is why the default is set to true).

I agree that's a bit of a hassle, but right now there is no better solution.
There is an open ticket to allow for pseudo-sentence case transform in Zotero - that should be a quick fix, but someone has to do it.

It's a *hidden* preference: you have to type about:config in the Address Bar of Firefox and press Enter to display the list of preferences. (and click the button "I'll be careful, I promise!", to continue.)

Then, type extensions.zotero.capitalizeTitles in the Filter box and set the value to "false".