I assume you are talking about the game play videos. If so, game play videos do not come from Launchbox. Those are Emumovies. So the prioritization of Launchbox over Emumovies will affect images not videos for a game. There are options for Steam Videos and BigBox Cinematics in the Launchbox media download tab, but those rarely show a result.
Somewhat correct. You can delete them if you want. That''s up to you. The steps you mention are for platform videos. The videos that actually represent the different platforms not that actual game play videos. What you will want to do is select all the games for a platform and go to >Tools>Download Metadata and Media and then when you get to the Emumovies screen make sure low res video options are unchecked. There are a couple others ways to do this like through the audit tool, but the steps will be pretty much the same.