Could some one please confirm.
1a. Yes! See the documentation for performing a Rolling Upgrade.
1b. Rolling Restarts are a function made possible by using parcels, not rpm/deb packages. Cloudera Manager does not present Rolling options for clusters that do not use parcels.
2. Good question. There is a concept of a Service-Level Rolling Restart, and a Cluster-Level Rolling Restart. The documentation link above elaborates:
"If you have HDFS High Availability enabled, you can also perform a cluster-level rolling restart. At the cluster level, the rolling restart of slave nodes is performed on a host-by-host basis, rather than per service, to avoid all roles for a service potentially being down at the same time. You cannot perform a cluster-level rolling restart unless you have High Availability enabled. However, you can perform a rolling restart on individual services, including HDFS.
Note that JobTracker High Availability is not required for a cluster-level rolling restart.
If you have HDFS High Availability, then in order to avoid having your NameNode (and thus the cluster) go down during the restart, Cloudera Manager will force a failover to the Standby NameNode while the critical roles are being restarted. If you have JobTracker High Availability enabled, Cloudera Manager will force a failover to the Standby JobTracker while the critical roles are being restarted."