Welcome to the forums and thank you for taking the time to post.
I am sorry to hear that you didn't find the videos helpful.
In answer to your questions -
You would need to find a temporary replacement whilst the phone is being valued.
If the valuation of the phone is less than the remaining amount on your account you would either be able to pay the difference should you wish, If not we would send you the phone back.
So the phone and the sim are different contracts and run for a different period of time, with the outstanding amount left on your handset, it would suggest that there is more time left on this. If you wish to leave you contract you would need to pay the rest of the outstanding amount on the handset.