i am thinking of putting a row of block as a form of curbing in the garage. do i need to prep the concrete floor first or can i just start laying the block with mortar?

Chris it depends on what you are going to use the curb for. If it is something that will have horizontal force then it should be pinned. If only verticle or no force then just make sure that the concrete is clean first.

i'm going to have the block under the walls. when we bought this house, it has the stud walls directly on the garage floor and it is even with the grade on the outside. and rotting away

sounds like this one is a full-spectrum job. build exterior supports to hold the wall up, cut the wall, put on a new plate of pressure-treated that will rest on the block, then set and pin the block and set bolts in the block with extra mortar to hold the plates. everything cured in a week, remote the supports and tie down the wall.

this is Structure, and needs approval by your code guys. ask them how they want it done before you start.