General :: Downloading ROM To Flash / Update Directly To Phone?

I've recently been getting into more security cautious habits with encryption and what not, due to this whole NSA/Big-brother is watching business... But I have a question (more may pop up as this discussion goes on).I am still getting a hang of all this encryption business. If I go ahead and do a full phone encryption with my GN2 where will I stand as far as backups to Dropbox/Copy/Google Drive/etc.?

I currently have photos and such backing up to copy, and I often move backups made through recovery to Dropbox and such. If I were to have photos automatically sync to copy or move system backups to dropbox wouldn't that render them basically useless as I am assuming they move out of the phone encrypted (not being decrypted as they exit).

The photos would be unusable anywhere besides my phone right? So moving them off my phone to share vacation photos for instance would be impossible, and if my phone were to crash they'd be irretrievable? Making the backup process pointless.

Wouldn't the back up be rendered useless as well, exactly when I might need said backup? If my phone were to ever crash or die for some reason, I would lose the encryption key, would even be able to do a full system restore through the recovery? It would seem that the encryption key wouldn't be kept with those back up files, so while it might place everything back in its correct place, it would still be unreadable. Or does it maybe keep the key in system files somewhere so that a full backup would restore the key as well?

I am also under the impression that I would not be able to flash through custom recovery either as the internal SD would be inaccessible from the recovery being it doesn't have the encryption key. I am currently running OmniROM and it is in a nightly stage still for my phone. I wouldn't be able to update nightly would I? I am assuming since it basically flashes/overwrites system each time, that I would be losing my encryption key and making everything besides system unusable then right?

And what about downloading ROMs to flash/update directly to my phone? As I download them from in browser or another app and they go to the default /downloads folder they would be encrypted. They wouldn't be accessible from there in recovery, but if I were to try and move them out of internal SD to the external SD they would retain encryption and still be inaccessible? So the only way to download ROMs and updates would be from PC and only move them to the external SD?