This Apple document answered many of my questions:
From my understanding:
I have enabled iCloud backup and the camera roll is included in that backup But unfortunately I have no access to it from the web (currently). And the camera roll on my iPhone 4 definitely does not expand out wirelessly and virtually to include the camera roll backup on the web.
If I delete a photo from my camera roll and then do a couple of iCloud backups then my photo might be gone for good. Not sure if iCloud is doing a differential or incremental backup or mirroring or something else. That said, I think that iCloud does keep my last three (full) backups. So I might be in luck if I delete a photo accidentally. But a full restore from iCloud would be required?
Once I run out of space on my iPhone 4 then I will probably need to move my excess pictures and videos off my phone and back them up separately.
I'm not getting rid of my computer just yet.