Yes the drives you see when you connect via USB are simply the storage areas (for charts) on your Garmin showing up as mass storage devices under Windows.
The NMEA output you need will likely be from the round 4 pin connector. Check with Garmin, they will probably offer a cable to connect to this with standard db9 serial port connector on the other end.
Yes you will then also need a serial->USB converter to hook this feed into your PC whether you like it or not, but it will then work with GpsGate.
I don't think the proprietary Garmin protocol you refer to will work with GpsGate, but even if it did note following:
"The Garmin protocol wasn't designed for real-time navigation purposes. Furthermore, since the protocol is bi-directional in nature rather than a streaming format like NMEA-0183, the synchronization between GPSy (the host) and the GPS unit client can get confused".
There no place like 127.0.0.1