Phone storage

No. ICloud is not a backup, its a syncing service.

If you turn on iCloud Photo Library, have it upload your photos, and delete one from the Camera roll in the Photos app, it will be deleted from iCloud as well as from the device.

You can if using iCloud Photo Library use the Optimize setting to reduce the amount of space taken up by the photos by making the versions on the iPhone have a smaller file size sacrificing a bit of quality.

You can export the Photos from the iPhone onto a computer or upload them to a different cloud service that does not sync the changes.

No, if you delete the photo on the phone it will also delete them from iCloud. You need to back them up to a computer before you delete them from your device.