So if your opponents characters ht and wt is greater than talim, which is EVERYONE, does that mean that the damage of the attack just goes down by half immediately or does the damage boost affect first then the damage goes down by half?

The damage boost is applied first, then Talim halves the damage.

Base attack > +X damage > Half new total.

stamp for cascade. And not EVERYONE is both taller and heavier. Ukyo, for example, is lighter.