Hello Aamir-
1.) It depends on your configuration, however, ACE will use the client IP by default and a Source Nat Pool if you have it configured to do so. Even with SSL on the front and backend, this still holds true.
2.) No.
ACE is not a prxoy server in any means. Even with a layer 5 content rule where ACE needs to terminat the client session to make a loadbalancing decision, once it creates a backend session, it steps out of the way and lets the client/server handle everything. In otherwords, you would never point your client browser to ACE as a proxy.
Regards,
Chris Higgins