#1) Is there a general convention of which body to make the i or j body in contact for best performance? i.e. the larger body should be i, smaller should be j.
#2) Regarding complex geometry, I noticed that it is suggested to split apart geometry to the region of contact. Does this mean that, say I have contact in an inner diameter of a larger part, that I should make the region around the contact area a separate part? i.e. make the single, larger part into two separate parts (connect with a fixed joint)? My understanding is that this is easier on the solver trying to locate points of contact
I am not aware of any benefits in selecting the larger body as the i-body. But the second note is definitely helpful if you have large and complex CAD files but you know that only part of the geometry is coming into contact. However, you do not need to create separate bodies after splitting up the CAD geometry. You can simply have two separate geometries under the same part BUT only reference the geometry of interest (e.g., the inner region in your example) in the contact object. Please note that the contact object references geometries rather than parts.
I am not aware of any benefits in selecting the larger body as the i-body. But the second note is definitely helpful if you have large and complex CAD files but you know that only part of the geometry is coming into contact. However, you do not need to create separate bodies after splitting up the CAD geometry. You can simply have two separate geometries under the same part BUT only reference the geometry of interest (e.g., the inner region in your example) in the contact object. Please note that the contact object references geometries rather than parts.