I have been working on understanding the inputs/outputs and transaction details as according to the UTXO model which is discussed in this question and also thinking about how it relates to transaction fee based on size in kb of the transaction which is discussed in this question. I want to clarify a few things, feel free to pick apart anything I say that is wrong in addition to answering my questions - since the questions are derived from my understandings.
It seems that the transaction size is mostly a function of number of inputs and outputs (in the sense that those are the things I as a sender have control over, where the other components contributing to size are more or less static).
Clarification 1: (ignoring the fee and change) Suppose Alice sends me (Bob!) 2 btc. She got these 2 btc as a result of Larry and Greg each sending her 1 btc. This means she has these two UTXO outputs each for 1 btc associated to her wallet, and when she sends them to me the transaction will have 2 inputs and 1 output, kind of like this transaction I found on a block explorer.
Once this transaction is processed,
does my wallet remember that these 2 btc came from separate UTXO's? Or does it "get melted" as someone alluded to in my first link. More precisely, if I send these 2 btc to Gerald, will it show 1 input or 2?
Clarification 2: (with fee and change)
Alice wants to send me 2 btc. She has previously been sent 1 btc by each of Larry, Greg, and Allan. So she has 3 UTXO's associated with her wallet, each worth 1 btc. She goes to send me 2 btc, but needs to cover the fee. For convenience lets say a .5 btc fee.
Does this mean she now has 3 inputs and 2 outputs contributing to the size of the transaction (and thus contributing to the size of the fee) (she needs all three coins to pay me and cover the fee, and then I will be one output and her "change address" will be the other.
Lastly, I think I understand that most wallet services "handle" all these details for you in the sense that you can just put the btc address and how much you want to send and they handle the rest.
Do they typically do this in a most efficient way? For example, say I use a wallet like a Nano Ledger S. If I have a UTXO for 25 btc, a UTXO for 1 btc, and 5 UTXO's for .5 btc and I go to send someone 1 btc, will it choose the UTXO's that result in the smallest transaction size?
Addendum: I do plan on being active on this site, so please do critique if my questions can be improved to better fit this community.