Location of storage folder

Hi,

The storage path cannot be changed. But you can set the media manager to use the /media folder instead of the /images folder. Just navigate to "Content" -> "Media" and set the path at the options.
Regarding the select image from server feature this is something that we consider to add at the future.
Regarding the source images, the extension needs those images in order to be able to generate thumbnails. We also added watermarks so, that's a second reason to keep the original images.
Here are some things you can do:

1. Delete the source folders manually.
2. Do not upload such huge images. Reduce their size before uploading.

Regards