Its all gonna get covered with mortar anyway when I put the tile on, right? So.... Is it NECESSARY to mortar the joints before hand or not?
Nothing is necessary of you don't care about water damage. If you care about doing a good quality job that insures that the area is watertight then mud the joints. Remember that water is the worst enemy of a house next to termites. You would be surprised to see what a hairline crack can do to the structure of a house. Not to mention the mold and the insurability of a home. Water damage on an insurance record is shared on a national database of insurers and when its there, good luck every getting insurance.
If the top layer of plywood is treated then there is no reason whatsoever to apply water proofing. If it isn't treated then there is always a small risk that large amounts of mold could develop in the plywood, but it is a small risk. I would pull up the cement board and put roofing felt under it. Or if I didn't want to take the time for about 80 dollars I can pick up a spray on waterproofing layer to the cement board that most tile flooring stores should carry. Tile membranes are good product, but somewhat expensive to use. Grout is sealed to protect the integrity of the grout and no other reason. A small amount of floor movement and water will have a direct path past the grout.
You want to make it as water tight as possible, so yes, it is necessary.
