If the Law of Conservation of Matter states that matter cannot be created or destroyed, how is cell division possible, considering that cells are matter?

Each daughter cell is half the mass of the parent cell.

so does that mean that each daughter cell and every preceding cell after that becomes increasingly lighter?

No, they grow between divisions. In fact, growth is what triggers division.

There seem to be a lacking in knowledge of what biology/chemistry is actually based on.

 

Organisms just interconvert different molecules into different structures. What goes in has to come out again just in a different form

 

In a simple inorganic chemical example:

 

2 Na + 2 H2O --> 2 NaOH + H2

 

Everything that went in has come out again, the molecules cells are made of work on exactly the same principles but are far more complex with many more steps to create them.