I understand that you use a wallet online. Then what does it mean to download a wallet on your computer. Your wallet is on the website and your hard disk does not have this wallet is irrelevant. Knowing the password you always will go into it.
Correct me if I'm wrong, but you can download the wallet to your hard drive and synchronize it (which takes forever usually lol) This type of wallet is what I'm worried about losing the data on.
Reason being, I downloaded 5 different wallets for 5 different currencies, but I'm about to reformat the computer. So does that mean:
A - I need to back up all the wallet data on a usb and then put it back on the computer once it's reformatted
B - I could just save the addresses/passwords for each wallet and clean reformat my computer then re-download the wallets and be good?
I know there online sites like that have wallet options, but I feel like it's mixed emotions when it comes to long term holding of coins in an online wallet.
Does that make sense or no?
Depends on wallet you are using. Best are wallets which gives you seed from which you can make full recovery (deterministic wallets)... then the only need is to store this seed.
So if you are using deterministic wallet (most of them are) ... just keep the copy of seed. Other cases you have to locate and store the wallet file( do not forget pass or make unecrypted backup).