" Now I have to apply for citizenship "
Since you have to yet apply, there is absolutely no question of any rejection based on your previous address.
You can move around anywhere in canada (except quebec which i believe has different rules from other provinces) and it has no relevance whatsoever towards your citizenship application. And even for quebec, as far as i know, to apply from there, you should be a quebec resident for more than a yr or something like that.
When you file your application, give them whatever address you want them to mail letters at, it still can be different from your residential address. My roommate since she filed for her application has changed the address atleast 4 times, by simply calling CIC, and none of those addresses have been our residential ones since we are moving every 2/3 months.
About your lost passport, when you mail your citizenship application, you also have to mail copies of your passport and landing paper. And, when you get canadian passport, you are required to submit to them your previous passport. Perhaps you should apply for a new passport thru the indian (if u'r indian) embassy in Toronto and I might takes 2/3 weeks for you to get the new passport. I don't know if you reported it to your country consulate when you lost your passport, as i believe you are required to do so. Also, are your landing papers safe? The landing paper should have the number of your previous passport which your country consulate will ask for.
As i tell everyone, call CIC and tell them that you lost ur passport and want to apply for canadian citizenship. It's a possibility they might tell you to not bother applying for another passport as they can track down your info thru the landing papers and the passport number too.
From Toronto, the *entire* process time is 6/8 months under normal circumstances.
As for your too many questions and not enough people to ask for, just post them all here!
Hope this helps.
