Simple answer.
1. Yes each wallet must be downloaded unless it has an online wallet. Never use an exchange as a wallet.
2. You will lose your coins if wallet.dat is deleted. Find wallet.dat here :
First search %appdata% hit enter.
Look for the coins name and open folder. A wallet.dat file will be there. Back it up !!
To restore your wallet or to change to another one simply replace the wallet.dat file.
3. Use this forum.
So I decided to take the dive and start backing up my wallets, but wanted to double check on a few things which tie specifically into the post above:
1. Do I just need to backup the "wallet.dat" file or the whole folder that contains the wallet.dat file in my - %USERPROFILE%\AppData\Roaming\"coin name here"
2. If I change the name of my wallet.dat will it corrupt the file. For example, say I have like 5 different coins and 5 different wallet.dat files I wouldn't know what is what. (unless of course I make different folders that labeled the coin...yes I know it's a simple solution, but just wondering) So if I changed them to say bitcoinwallet.bat & ethwallet.bat etc. etc. would those files still work? OR could I do that, but have to just eventually change it to wallet.dat when I want to use it again?
3. If I delete a wallet, then reinstall a wallet, do I just need to go into this folder %USERPROFILE%\AppData\Roaming\"coin name here" and just replace/overwrite the "wallet.dat" file once the new wallet is done syncing with the network?
I figured I'd start with a wallet that has a small amount in it so in case I screwed something up I wouldn't lose much.