Pricing and Function Questions

Right now I have Creative Suite CS5 Video Premium.  I am interested in upgrading every 2 versions (so am looking at mid 2014 for a upgrade to CS7)  Usually, at most, these upgrades run me around $800USD, and then I'm good til CS9.  I see that Adobe is pushing this Creative Cloud, but I had 2 primary questions.
1. This isn't Cloud Computing, is it?
I understand ACC offers many web-related services, but programs as powerful as Photoshop, Illustrator and the like can't be remote-hosted applications that I connect over to via the internet, right?  Am I right in thinking that the ACC still requires the bulk of files to be installed, but then is in tandem to providing additional online services and benefits.
2. Will the pricing structure be flexible?
I would think that an "ala carte" would be PERFECT for ACC, since I can pick and choose just what I need.  But with the recently announced 2 year production cycle, that means that to upgrade every 2 versions (48 months), I would have to be paying $2,250 vs a one time $799 upgrade like before.  That's a near 300% increase in pricing.  I love Adobe products, but this obviously has me concerned if I'm not seeing eye to eye with what ACC is offering.
Also, Adobe isn't planning on stopping individual product purchase are they?  In other words, they aren't nixing a CS7 version for the sake of pushing people to Cloud services, are they?

I looked it over, and the following programs are really the only ones I'm interested in:
Photoshop (Extended if available)
Illustrator
Dreamweaver (really wish they'd integrate CF Builder function into this)
Acrobat Pro
I was looking at their Edge tools, and some seemed cool: Animate, Reflow, Inspect, Typekit/WebFonts.  But that's pretty much it.
I saw that they offered per-product subscription pricing, but at $15/mo/app, even that would easily go over $50/mo.  Don't get me wrong, if I wanted Master Suite, $50/mo is a freaking steal, but it just seems geared more towards school/studio pricing than individuals.

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