Ok. Lots of questions 
I think most can be answered with this:
- Quality profiles are ranked bottom to top by sonarr (orange arrow). Qualities on top are better than those below.
- If sonarr finds anything that you want (the quality is enabled with the checkbox), it will download that.
- If the quality is below your cutoff (red), it will download that, but upgrade the file to a better quality if/when it becomes available later.
- If the quality is on par with your cutoff (green) it will consider the episode “done”, and not upgrade to a better quality, even if it becomes available later on
- If the first quality sonarr finds is above your cutoff (blue), it will take that and consider the episode “done” and again, not try to upgrade to a better one.
- Given multiple choice, sonarr will go for the “best” (as defined by your ranking) quality at the top.
The cutoff should be read as “I want at least this quality, but anything better you can find me is cool too. If you find a lesser quality file, I’ll take it, but keep on the lookout for something better please.”
I hope this already helps you a bit.
Your specific questions are easier answered with a screenshot of your quality profile (including cutoff), since I’m not sure if you re-ordered the qualities or not, so as to favor webdl-720p above anything else…