citeproc-js VS obsidian-citation-plugin

I don't know if this fits your KaTeX analogy, but citeproc has a javascript implementation. Uses CSL-JSON to render citations.

https://github.com/Juris-M/citeproc-js

Does https://github.com/hans/obsidian-citation-plugin maybe work for you?

I've been in contact with the creator of the Obsidian Citations plugin which you may have noticed has been relatively quite for the past year or so.

Another problem is that no matter how much I tried, the two available Zotero plugins for Obsidian do not work for me (this https://github.com/mgmeyers/obsidian-zotero-integration and this https://github.com/hans/obsidian-citation-plugin). I am not sure if that is because I'm on Linux, but they just don't work. However, RStudio on Linux works great with Zotero, and I can easily add citations using the Better BibTeX for Zotero plugin (https://github.com/retorquere/zotero-better-bibtex) to create citation keys. That way, I can simply copy/paste the citation key (e.g. '@lastname2020') in the text and have it render into the citation when I render the file in Rstudio. I sometimes write documents with > 300 references, and Zotero running in a Windows VM, trying to refresh a huge word document would take a long time, and would lead to corrupt citations. That's no problem with a markdown/Rmarkdown document.

I like it more than other options like Citation: https://github.com/hans/obsidian-citation-plugin

There are several plugins to organize citations available for Obsidian, although you'd probably need to be willing to migrate your workflow (notes, citations, etc.) into it to get the most out of it.

How about this?

For (2) above, I use the reading note template provided by obsidian-citation-plugin.

6+7) Yes, that's correct! I read on the ereader (Boox NoteAir), then import annotations into Zotero (described above). The annotations are exported to Obsidian using the citations plugin (I could share my template, if you're interested). Now I have a markdown document with metadata and all the highlights. Then I can go through the (very time-consuming!) task of summarizing these highlights into notes. I write two types of notes: first a 'literature note' (one big one, some I'm not completely sticking to the Zettelkasten method here) with headings for each idea from the texts that I want to have a note on. I rewrite the highlights in my own words (and have the text open for reference while I do that), and sometimes I'll embed some highlights as quotes if I think it's nice to keep the original wording of the author there too. These literature notes stick closely to the original text; I won't add anything. The second type are like 'permanent notes'. In these, I might add ideas from other authors, my own ideas etc. Perhaps 'living notes' would be a better term, because this is where I try to synthesize ideas from different sources (and thus they'll constantly be expanded and rewritten as I read, learn and think more).