Q: Secure Erase Free Space Failed - Couldn't Create Temporary File

If you are worried about free space being scavenged for data, you should System Preferences -> Security -> FileVault (and make very sure you do not loose the encryption key).

That way as soon as you delete something, it is just random bits that can no longer be decoded.

With respect to Fusion.  The SSD should not have its free space erased (partially because it is not doing what you think it is doing, and because it shortens the life of the SSD).  I do not know if Disk Utility is smart enough to avoid trying to erase the free space on the SSD.  If the system is all SSD, it does not even give the option.

When you write anything to an SSD, the SSD under the covers just remaps the sectors you are writing to with pre-cleared sectors, and moves your old sectors into the pool of sectors to be cleared.   Over time, yes these remapped sectors will be cleared and reused, UNLESS they start to go bad, and then they are removed from service and it is possible with the right kind of software to read what is in those retired sectors.

And most SSD sectors can be written to a limited number of times.  The SSD controllers do what is called wear leveling to extend the life of each sector by trying to avoid having any give sector written too many times.  But intentionally doing a secure erase on free blocks is just asking for an SSD to die sooner rather than later.

I personally when with FileVault so that I knew that anything I wrote to the my SSD could not be seen after it was deleted (NOT Fusion, just an SSD).

Is there much of a read/write speed reduction with FileVault?

Not really.   But if you feel it is slowing you down, you can always turns FileVault off and go back.  In my opinion, if you have an SSD (and a Fusion drive has an SSD and rotating hard disk blended together), then because of the way SSD's work, if you are worried about data security, it FileVault is the best approach.

<Use FileVault to encrypt the startup disk on your Mac - Apple Support>

But why do I need the encryption key? I am assuming I don't need to frequently enter the key.

Short answer: Because if you loose the encryption key, you cannot decrypt your data.

<Use FileVault to encrypt the startup disk on your Mac - Apple Support>

Your aaaa-bbbb-cccc-dddd-eeee-ffff key is ONLY needed if you are attempting to decode your disk via another system.  For example if something goes wrong with your Mac and you have moved your disk to another system for repair.  Or if you are trying to boot your system into Disk Target mode so you can turn your Mac into an expensive external disk for another Mac to access (generally because you need to do something on your disk from the other Mac that cannot be done from the Mac itself, or if the other Mac's disk has failed and you are trying use the Fusion drive as the boot drive for the other Mac to do some repair work.

Or if you need to boot into the Recovery Partition, you will need the key to use the Recovery Partition to access the boot disk, if you wish to do things like re-install the OS over top of the existing install, resize your partition, run Disk Utility repair, etc...

For me to be interested in things like that it needs to work seamlessly in the background.

First, if you don't like it, you can turn FileVault off and never use it again.

But under normal boot situation you are asked for your Admin password as you boot to unlock the disk, NOT the aaaa-bbbb-cccc-dddd-eeee-ffff key.  Your admin password unlocks the key and your system boots up normally, and you do not need to do anything else until the next time you boot.  Under normal conditions you will not even need to use the encryption key.  But don't loose, just in case.

Again, the benefit to FileVault is that if someone gains physical access to your Mac while it is shutdown they cannot access your data.  Deleted files in the free space is just random bits.