Erase all contents and settings

The "Erase All Content and Settings" will just erase the device without touching whatever iOS version was already installed. So to answer your question, no this won't put the original iOS version on as when it was new -- it will still have the same version that was installed prior to erasing.

With out-of-the-box meaning if my device is currently on iOS 7, it will revert back to iOS 4 (that's what was on my device when I bought it) ?

Does it free up your storage space?

Probably not.

hi , i just reset my iphone to the fabric reset option, but i had a few contacts blocked and i would like to know if those numbers will remain blocket ? i hope so please can u tell me

thank you

I understand that part but I don't remember my pass code. so what should I do

I don't recall the pass code that I original set up the phone. I have change pass code so many times.