@Judy, I like your post; the Shmetsy suggestion and the part about "treasury, no need to reply." Those two things are very helpful.
I've always thought it good manners to thank someone for including my items in a treasury when they send a convo. It's good to know it's not necessary to actually send a convo of thanks back as long as we post thanks on the treasury.
As far as thanking someone for favorites, it's easy to understand why someone would want to. What's good manners in the home turns out to be bad manners on Etsy. Let's not make it a serious crime. What I do is add that person to my circle. That's acceptable, isn't it?
It's so important to know good etiquette on Etsy. Could we also discuss others things perceived as rude or spam, or just not necessary?