To answer your second set of questions first, there is not a "digital ref number" on audio files. iTunes Match uses a combination of tag data, track length, and audio fingerprinting to do its best to match the track to a song in the Store. If it matches, it will use the store copy instead of uploading your copy.
To your first questions, if the song is matched, you can delete your library copy and download the store copy. No, you cannot control the quality. Songs from the Store are in AAC/256 format.
So, given that track length is one of the factors used by Match, it seems unlikely that Match will be a useful way to recover damaged tracks - is that correct?
I can't guess one way or another on that, but do be aware that Match is less than 100% accurate. See this thread: