Cell balancing in BMS
It highly depends on the IC you are using. Typicaly balancing is done in the charging cycle.

Passive balancing is pretty simple. I am not entirely catching the point of your example so let me try another example. You have 3 batteries in series. Two of them are 3.5V but one is at 3.7V. To balance the battery cell, a resistor will be connected (usually using FETs) in series with the battery cell, thus the current will start to flow from the cell, through the resistor, slowly discharging the battery. The main function of BMS is to protect the battery (sometimes even without passive balancing). Its goal is mainly to detect overvoltage and undervoltage, thus the battery SHOULDN'T explode even without passive balancing, its life span will be shortened though.

Not entirely sure what you meant by that. Once you connect the batteries in series and connect the BMS, the device will appear as a simple battery back, but protected. Thus charging will be same, as charging batteries without the BMS.


EDIT: 2. From my answer it may look like it's not neccesary to use cell balancing, which is not how it should've sounded.