Question two: What would happen if someone were granted the realization but rejected the idea completely as foolishness? Not impossible, since it seems primarily elven people or groups tend to focus on it, so say a really Nordic Nord came to the realization and just tossed it as elven kookyness? I would assume not all that much happens, but these are crazy magical principles we're working with here.
I'd say you are confusing the realization (which, I suppose, isn't to hard to make) and the actual state of mind. CHIM is the latter: the strong-mindedness to preserve individuality in the face of its illusionary nature or, if you will, the metaphorical balls to do so. Coming to see cosmic truth and then denying it would rather ironically seem like a prime example of it.
At any rate, though, these questions are of the type that a few philosophers in Tamriel might consider, but as far as we are concerned, they are mostly up to the creator of the character in question. CHIM is a metaphysical ideal, which (as is probably the case with metaphysical goals in our own world) necessarily involves a path of ascendency that cannot be fully put into words. Otherwise, it would be firmly in the realm of the physical, and no longer the prerogative of a few great souls who managed to transcend that realm. In terms of describing it in game, that means we cannot find any clear-cut theoretical guidelines that can answer questions such as yours, because those who have attained CHIM are very few and probably all did it in a way that only works for themselves.