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0) I want to keep my BTC for looooooong time without transacting - just like a savings account. Is the above combo ideal for my needs?
Yes it is.
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1) will i need to set the seed (passphrase) to both watch-only and cold wallet? Do they have to be the same?
No, You will have one seed and one public master key. Read more here: http://docs.electrum.org/en/latest/coldstorage.htmlQuote
2) I keep reading about how important backups are. I assume I totally need to backup my offline cold storage. But does it make sense to backup the watch-only wallet too?
Your public master key is linked with your seed(wallet).Quote
3) When I install these wallets how much GB they will take up roughly?
Less than an 1 MB.Quote
4) when I transfer from the exchange site, do I need to "receive coin" from the online wallet or from the cold wallet? Where do I send it to?
Your watch only wallet will show your offline cold storage addresses, so you don't have to worry about anything.Quote
4.5) I understand sending funds needs to be signed by the offline wallet. But do I have to sign received funds too?
No You only have to sign when you are sending, not at the time of receiving.Quote
5) Does the online wallet need to be online most times and would it generate all kind of constant internet traffic in the gigabytes per month?
No it doesn't and it won't generate GB's worth of traffic.Quote
6) in the future when I want to sell it, how do I transfer it back to the exchange site?
Simply by signing a transaction from your offline wallet and broadcasting it from any blockchain explorer. 