Shrinking is when you create a 100gb disk and then you shrink it down to 90gb
Thining is a type of virtual disk that occupies only as much space as the guest OS uses. for example:
you create a 100gb thin disk but the guest OS only needs 30gb of it. so the total virtual disk size on the disk system is 30gb and not 100gb.
yes with vmkfstools it's possible to do all:
VMware KB: Cloning and converting virtual machine disks with vmkfstools