Core-shell morphology of silica (SiO2) coated CdS nanocomposites (SiO2@CdS) of different shapes have been made for better stability, luminescence and photochemical activity of CdS nanoparticles. A thin layer (thickness 1-1.4 nm) of SiO2 shell is deposited over CdS nanorods (CdS-NR) of aspect ratio = 21 and CdS nanospheres (CdS-NS) of size 6-8 nm by alkyl silane agents. Synthesized nanostructures were characterized by diffuse reflectance spectra, HR-TEM, BET surface measurement, LB surface film, and absorption and photoluminescence analysis. Photoetching (PE) of CdS core led to blue shift of the absorbance onset of SiO2@CdS-NR along with the appearance of an exciton band at 485 nm due to the quantum confinement effect. Photodissolution of CdS core shifts the band gap energy from initial 2.4 to 2.6 eV for CdS-NR and 2.5 to 2.67 eV for CdS-NS. TEM images reveal the increase in aspect ratio of NR from 21 to 31 and decrease in the spherical core to 2.5 nm from 6-8 nm after PE. Photoetched SiO2@CdS-NC displayed highly intense fluorescence emission (SiO2@CdS-NS > SiO2@CdS-NR) than unetched SiO2@CdS-NC at 488 nm corresponding to band edge position. The Au (0.5 wt.%) deposition onto photoetched SiO2@CdS-NR(PE) composites highly enhanced the fluorescence intensity in comparison to 1 wt.% of Au and Ag loading. SiO2@CdS-NC(PE) displayed improved photocatalytic activity during benzaldehyde photooxidation under UV (125 W, Hg-arc, 10.4 mW/cm2) irradiation. Silica coating onto CdS particles improves the photostability and photoactivity of CdS upon long UV irradiation.