iOS Camera Roll and Photo Stream workflow
Solution 1:
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A photo stored in the Camera Roll is permanently stored on your device (until you delete it). Only 1,000 photos are saved in the Photo Stream on an iOS device, so if enough photos are uploaded to your Photo Stream the old ones will be purged. (But a Mac or PC will save all of the photos in your Photo Stream by default.)
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According to Apple, the downscaling does only apply on iOS devices — if you have Photo Stream set up on your computer, those photos will be full-resolution.
On your Mac or PC, your photos are downloaded and stored in full resolution. On your iPhone, iPad, iPod touch, and Apple TV, your Photo Stream photos are delivered in a device-optimized resolution that speeds downloads and saves storage space.
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Yes — to delete multiple photos, just tap the action button in the upper right corner, select some photos, and tap the Delete button.