Yes, 'conversational' means casual and informal. Colloquial words and expressions are informal too. You may have noticed the difference between formal style and conversational style.
You may sound informal as if you're just having a conversation or casual talk with someone. You're trying to convey your thoughts or opinion in an easy, conversational way, which may sound more natural and can be more persuasive or effective.
Yes, too informal or casual isn't a good idea. For example, if you use suc