once your site is uploaded you do not NEED to keep the pictures on your computer but it would be unwise to get rid of them, (save them on to floppies) i recommend you look for other things to get rid of first in order to save space so that your website is stored intact in case you need to re-upload it.
to the second question its probably best if you do.
When you upload your new site it should overwrite the files already on the web server.
If you changed your original site on your computer you can upload and tell NetObjects just to upload any changed pages. This will ensure that it overwrites the files up there with the new ones you created on your computer.