Problem syncing Outlook Notes and iphone 4s notes in iTunes.

I lost 500 notes because an Apple advisor did not instruct me properly. I didnt know that Notes could not be stored on the local folder, My iPhone,for backup to the Cloud. On the device, 4s, Notes has to be in either an iCloud or an imap account. The loss for me is that I backed up to the Cloud with the Notes option selected. What I didnt know was that my iphone setting for Notes was set to My iPhone, which is the devices local folder. Because my notes were configured to be located on the phone,after wiping out the phone and restoring the entire ios, all the data was lost into the digital universe of un associated 1's and o"s. In other words, destoyed, never to be recovered. I wish there had been more precautionary advise provided by Apple.