Mostly correct. I recommend that you hold at least 700 gems for "emergency" use during GainsWeek events, but other than that investing in your Shop is the best use of gems for tournament gains.
I don't remember the max deco level, it's not on my screen, definitely right there near 100. You'll need a few trillion shares in total to max them all out (except neon, which goes much higher in cost than the others).