Re: Why can't the Federation use cloaking technology?
The Federation has been shown in the past utilizing a type of cloaking technology when dealing in Cultural/Pre-Warp observation scenarios such as Duckblinds and Encounter Suits. There is also the example of the Cloaked Holoship from Insurrection but the books have pointed to Section 31's involvement there as the reason for the cloak existing.
All in all, the Federation has the ability to cloak things, but apparently not in a way that breaks the Treaty of Algeron.
My feeling on this is that the Treaty probably only prohibits ship mounted cloaks? I know the cloaked encounter suits pop up a few times in the Post-Nem novels, in DTI: Forgotten History
"I love humans. Always seeing patterns in things that aren't there." - The Eighth Doctor