If you are blocking them using .htaccess OR any firewall, it will not slow down the website's performance. Yes, the server will process the request but that is in fraction of seconds and won't affect the website functionality.
Not exactly true. If you're processing entire countries, yes, it has the potential of slowing things down. Depends more on how powerful your server is and how many countries you plan on blocking.
I have huge chunks of the world blocked via IPTables/CSF, and I get no noticeable impact.. but if you're on a slow host, then everything is going to be slow.. Take a look at CloudFlare which pipes everything through their system first and lets you do the blocking there with no impact on your server.
Large IP lists in either itables, cphulk or htaccess can slow down access. However, unless your system is very high traffic (100's of req/sec) or you have very large lists (10,000's) of IPs, then you will likely not have any problems. We recently shave ~0.25s (10%) from page load times on a site by having them remove the 35,000+ rules in their .htaccess and simply redirect these to a script. So large htaccess files (especially rewrite rules) can slow down access on busy systems.