What is the /cache partition? What purpose does the /cache partition in Android serve? Are there any cases where clearing the /cache partition could result in lost data?
/cache partition is mostly for saving the downloads from Google Play Store, found in /cache/downloads. It also can hold the recovery log found in /cache/recovery called last_log as well (this holds any errors and/or diagnostics from the recovery binary a lá CWM or stock, which will get logged in the file to aid debugging and development of the recovery binary).

There is also another directory in there called lost+found which holds any recovered files (if any) as a result of file-system corruption, such as incorrectly removing the SDcard without un-mounting it.

So really, there is no loss of data from clearing it. 

In fact, upon Android boot-up, the script will clear out the /cache/downloads to make way for any new downloads/updates from Google Play Store.