Low Earth orbit debris isn't a long-term problem. Atmospheric drag is enough to bring things down before too long. At the ~600km altitude these satellites use, they might last a decade or two before deorbiting naturally. Possibly less, since smaller satellites have proportionally more drag.
Higher altitudes are a much bigger problem, since debris there can stay up for a very long time.
You're correct. In addition, it's important to note that conjunction (collision) risk is proportional to spacecraft cross-sectional area. Thus, even with 100 of these small 10cm x 30cm spacecraft, they still pose less debris risk than a single satellite with a few square meters of solar panels (of which there are plenty already in orbit).
I don't think that's quite right. Say for example a number of small satellites were arranged on the points of a triangular grid pattern, with the points the same distance apart as the diameter of the spacecraft: This would result in a much higher collision chance (for a spacecraft passing through) than if there was a single satellite with the same amount of cross sectional area.
Higher altitudes are a much bigger problem, since debris there can stay up for a very long time.