Can I achieve "Play & Charge" through the USB audio input, with a Cayin N3 as the transport, using a powered USB Hub?
Yes.
If so, will the iDSD's battery be bypassed while powering the device through the USB hub?
As long as the power delivered by the hub (and negotiated according to USB Standards) is sufficient to support the full power consumption of the iDSD micro, yes.
In Eco mode the micro iDSD is guaranteed to be powered from a standard USB 2.0 Port (500mA limit).
In normal mode there may be just a tiny bit of power draw from the battery to supplement the 500mA, depending on volume and sampel rate.
In Turbo Mode nearly half of power will be drawn from the battery UNLESS the USB port supports more than 500mA current and is compliant with the USB battery charging standard V1.2 (BC1.2 in short).
ifi recommends using a BC 1.2 compliant Orico USB Hub. Is BC 1.2 strictly necessary to achieve play & charge?
Only if you want to use either Normal or Turbo mode.
For normal mode, you need BC1.2 to recharge a depleted battery in acceptable time while also playing music.
For Turbo Mode, BC1.2 is needed, otherwise your battery will be flat in around 12 hours of continuous play.
If you do not play music continuously and you have not installed Firmware 5.XB (it disables sleep mode), the micro iDSD will charge while idle (audio stream must stop). That way it should play indefinitely even in turbo mode, on a 500mA port, if no more than 8-12 hours listening followed by an idle time of > 12 hours.
Will any of these USB hubs (BC 1.2 complianr or not) serve my purpose?
First, if you need to buy a hub anyway, please make sure it is BC1.2 compliant. The extra cost is minimal and it means no worries on the charging front. As a rule, USB3.0 hubs with high power external supplies will also be BC1.2 compliant, but if this is not explicitly listed, there's no guarantee.
Secondly, you may want to make sure to get a hub that uses a 5V external power supply. This way you can (significantly) upgrade the power supply & sound quality by adding a very low noise replacement power supply (e.g. iFi iPower 5V).
For some more cash (but additional sonic benefits) we recommend the iUSB 3.0 nano to pair with the micro iDSD.
Among other things, it also handles the power supply side with extremely low noise, provides USB signal re-conditioning and can even be used to charge a smartphone/tablet/DAP in parallel with the iDSD micro using a suitable accessory cable that allows charge & play for the source.