Solutions database, how are the attached files stored?

I have a quick question about solutions within SD+ I want to attach all of our procedures that are currently stored as word documents on another server, into separate solutions in SD+. my question is:- if i move the files from their original location, does this break any "link" or is a copy of the file literally attached to the solution?

If it does cause a problem then i propose moving all the word docs onto the same server as SD+ into a dedicated solutions folder, would that work?

Finally, if a doc is attached, and the original doc is then updated, do the update show in solutions, or do I need to re-attach the doc?

Many thanks (think i'm almost done hogging the forum!)