Q1: What does "players can't reduce play costs" mean, exactly?

This effect prevents costs from being reduced when play costs are to be paid. This effect affects both players.

Q2: If a "players can't reduce play costs" effect has activated, can a card be played using a "play without paying the cost" effect?

Yes, it can be played. "Play this card without paying the cost" effects aren't effects that reduce the play cost.

Q3: If a "players can't reduce play costs" effect has activated, can a play cost be reduced using an effect on a Digimon in the breeding area?

No, play costs can't be reduced. A "players can't reduce play costs" effect isn't an effect that affects cards that activate play-cost-reducing effects, it's an effect that affects players. Therefore, the target players can't reduce play costs.

Q4: If a "players can't reduce play costs" effect has activated, is DigiXrosing possible?

Yes, DigiXrosing is possible. However, it isn't possible to reduce play costs through DigiXrosing. Therefore, a player can't declare to play a card in a state where its play cost can't be paid.