If I transfer BTC to a friend/family, they now know my wallet address, correct? Does this mean they can see all the transactions I have done from that wallet? It seems like wallet information is public except for identity, but that would be forfeited once I make a transfer, right?
Off course yes, if you send any fund from your wallet to other person wallet then he can see your all transaction and balance of your wallet. For this reason when need to send any assets from my wallet to my friend wallet, then i create a temporary wallet then sent my fund from my wallet to my friend wallet.
No you're wrong, the receiver won't be able to see the balance of his wallet, he will only be able to see the amount of BTC he had on the sending address at the time of the transaction and the amount he is currently holding on the change address of the transaction if he didn't send them elsewhere since this transaction.