Best of using Cubase and Reason together - use Reason for all your synths, drums and samples and automation etc, but use Cubase for sequencing and effects...
I've never managed to use Cubase to use the qwerty keyboard like a piano keyboard, not sure if it does that, I'm a mere amateur - so you have to click it all in using the mouse, or better still buy a USB (piano style) keyboard
Latency is a time delay between the moment something is initiated, and the moment one of its effects begins or becomes detectable. In this case it's the time when u play ur keyboard and the time when u here the audio signal in ur speakers.
the latency is displayed in the cubáse device configuration under VST-Audiobay so u need to change the drivers till u have the lowest latency.