After 4 days of efforts I finally made my code run properly.
Steps to solve the 
Data binding error like
error: package com.packagename.databinding does not exist
error: cannot find symbol class CustomMainActivityBinding
The app gradle must have below code added in order to view more than 100 errors that come by default 
allprojects {
gradle.projectsEvaluated {
    tasks.withType(JavaCompile) {
        options.compilerArgs << "-Xmaxerrs" << "4000"
        options.compilerArgs << "-Xmaxwarns" << "4000"
    }
  }
}
Gradle dependencies for data binding and Room arch components
annotationProcessor 'com.android.databinding:compiler:3.0.1'
implementation 'android.arch.lifecycle:extensions:1.0.0'
implementation 'android.arch.persistence.room:runtime:1.0.0'
annotationProcessor 'android.arch.lifecycle:compiler:1.0.0'
annotationProcessor 'android.arch.persistence.room:compiler:1.0.0'
Note: Gradle plugin version is 3.0.1
I changed my all VMs to implement Observable and call 
registry.notifyChange(this, BR.bar);
in case of notify change and also implement overridden methods 
@Override
public void addOnPropertyChangedCallback(OnPropertyChangedCallback    
callback) {
registry.add(callback);
}
@Override
public void removeOnPropertyChangedCallback(
OnPropertyChangedCallback callback) {
registry.remove(callback);
}
These things made my code Build, but it run without exceptions when I solved the Room query related errors. Which was the main reason, code was building but not running. These errors I could see when I Rebuid my project again. 
UPDATE: 
After Android studio 3.1.3, Message window is gone and now all build error  appears under Build view. Although there is toggle available to get textview response of error, for data-binding errors it isn't sufficient. 
Solution that helped me:
- In Command promt/Terminal navigate to project root.
- Run this command "./gradlew build --stacktrace" if Mac or ".\gradlew 
build --stacktrace" if Windows.
- Now search for "error:" tag and the compile time errors will show up.
I couldn't get these errors in IDE.