Checking my understanding - How to add C-wires for smart thermostat install x3
Your wiring plan looks good and you seem to have a correct understanding of the wiring and how it should work.  That bundle with the one green and 4 reds is the "C" wire.  The color makes it hard to follow in your diagram, but I guess you used real world colors, so that makes sense.

The 24v transformer will be AC power (alternating current), so it doesn't really matter which terminal is R and which is C.  One wire goes to the R terminal on the thermostat and the other one is C.

The W wire controlling the fan is sometimes done for safety to make it impossible to call for heat without the fan also being on.  That can also be done to get away with using one less wire, but either way that happens and I wouldn't worry about "fixing" that unless you have a strong need for turning the fan on by itself.

The transformer only powers a small coil in a relay to turn the devices on and off.  It might also supply a small amount of power to the control boards, and after the update it will supply power to the Nest.  These are all so low power that you shouldn't need to worry about it.  You can check the voltage of the transformer while the system is running to make sure it's not dropping low, but I don't see an issue with what you are planning.

Isolation relay is used if you want to power the thermostat with a different transformer than the equipment.  So, for instance if it was convenient for you to power the upstairs thermostat from the transformer that powers the basement unit, that would be a problem.  The thermostat must be powered by the same transformer as the equipment, which is what you plan on doing.  No addition relays should be needed.