Please check inline reply:

1. What are the differences  between a collaboration  Portal and Publishing
site.? I am asking this because, if we turn  on publishing  features on a
collaboration site, then it also behaves as a publishing site. So, what
exactly differentiates them.

When you build a Collaboration portal  you get a site  collection with
multiple sites like a News Site, a Document Center and a Report Center. The
Publishing Infrastructure and Publishing features  are already turned on. If
you turn the publishing features on in a Site collection built using the
Team site as the top level site you get something similar, but don't get the
extra subsites automatically.

2. What are the differences between a Collaboration Site and a Team Site?

If you mean Collaboration Portal see the answer above. Otherwise
Collaboration defines what a site is used for and Team site defines a
specific set  of functionality added to a site when it was built.

3. If I go Modify All Site Settings, I don't see the 'Quick Launch' link
under Look And Feel heading. Why?



If publishing is turned on then you edit the Quick Launch bar and the Top
Nav bar using the Navigation link in the Site Settings page.


4. How to set Audience Targeting for Quick Launch? Is there any restriction
that it can be set only for Publishing site and not for a Collaboration site
or vice  versa?

You can only use Audience Targeting with manually created links in a
publishing site. This isn't possible in a non-publishing site.