Can we use "porque" and "pois" indifferently ? are they interchangeable ?
Yes, you can, but "pois" requires a comma: Ele gosta desta camisa, pois ela é azul.
Is "...that shirt..." wrong? Is there another word for "that"?
'essa' or 'aquela' for 'that'. Preceeded by 'd' because of gostar in this sentence.
So if I want to say "he likes that shirt", it will be "ele gosta dessa camisa"?
Yes. But it depends on the distance of the shirt from the people talking:
Ele gosta dessa camisa -- He likes that shirt
(that is near you right now)
Ele gosta daquela camisa -- He likes that shirt
(that is far from us right now)
Why is it desta and not esta? The other example used desta to signify 'of this' but that does not make sense in this context
Because you must follow "gosta" with "de". In Portuguese, you like OF something. That's just the way it's used.
A tip for "gosta de"....I think of it as "is fond of"....then I never forget the "de"
Oh so "desta" = "de" + "esta"