iCloud Photolibrary download question

On your Mac you should keep full-resolution images, even if you need to get an external drive to fit the library. In fact you should also keep a separate backup.

Don't look at iCloud as a backup service. It's really a syncing service.

Yes, you can switch at any time. If you're switching from optimized to original resolution, it might take a while for all the photos to download.

Settings > Photos & Camera > check or uncheck Optimize iPhone/iPad Storage.

With iCloud Photo Library enabled everywhere, every single image or video you have should be displayed everywhere.

If you're not seeing that, it might be that the library is still uploading and syncing. If you inadvertently deleted some images, you'll have to restore your library from a backup, or do a fresh migration from your, now older, iPhoto Library.