Collections are unique to VS. Each collection is a file where it stores the data it needs to process your files, like a unique name for an album and the file location. It is basically VS's library, somewhat akin to the JRiver library. You can put it wherever you like or use the default location. I have a collection for jazz, one for jazz vocals, one for classical, one for blues etc. They are all stored in a folder I call Vinyl Studio Collections and it is in the main directory I use for all my general stuff. But, it can be anywhere, just be sure it is in directory that gets backed up. If you look in that directory, you will see a separate file for each Collection. It is in an internal VS format.
The input file to Vinyl Studio is the file that your Tascam produces. It should contain both sides of the album if possible. Vinyl Studio never changes that file. All the changes it makes are kept in separate files that reside in the same folder as the original file. Once you edit a file with VS, there will be a vsfile and a .crd file in that same folder. The vsfile stores information that VS uses, for example, to generate the wave form. The .crd file contains the corrections, like click, hiss, hum removal.
VS has an option to move your original files into a VS folder. I do not do that. I just leave them on the disk where I original stored them. For me, they are in a folder called Vinyl Originals with sub-folders of Artist and then Album. I like to be able to see and control where those files are. Once you point VS to them, you should not move them or VS will loose track of them.
Once you process the files (separate tracks, cleanup, tagging) you then write the track files out as separate files. They can go directly into the folder where you store you JRiver albums. You can set the folder structure, but it is usually Artist/Album/ Track Number Track Name. These files look just like the files your ripped from CD. You then import the new album folder into JRiver. You set the folder structure in Save Tracks - Options.
Note that if you are using DSD files, your can do track brakes but any cleanup will not be written to the output tracks. You cannot do cleanup on DSD files. If you want ot do cleanup, you need to output them as DSD. I started with DSD but switched to PCM for all but my absolutely cleaning records.