Hi Kate,
Answer to both questions is YES. Data Archiving to NLS physically removes data from the database, including indexes. Furthermore, BWA is offloaded since only data from the database can be stored in-memory. In other words, the combination of BWA and NLS is very smart.
Also in the context of HANA is having an NLS solution in place a great advantage. Appropriate Information Lifecycle Management will certainly pay-off in this case too !!
Best regards,
Sander
PS: Very interesting questions you have in this area Kate. These are real use cases for NLS. Maybe you can share in the future some of your experience on SCN. I look forward to it........