Hi Priya. CSD is a spatial filter that sharpens the activity (by attenuating low-spatial-frequency components) and tends to improve data quality. That's a separate issue from what you are talking about, so you could apply CSD if you want to.
What do you want to compare the pre-stim activity to? If it's across conditions, then a condition-average baseline should be OK, as it will preserve any possible condition differences. Otherwise, it might just be easiest to go with the raw power, at least for the pre-stim analyses. Baseline normalization is often useful, but it's definitely not necessary.