High quality music in iTunes Match
Apple covers this in their FAQ: https://support.apple.com/en-us/HT204146

Refer to the about file formats section:


  
  Songs encoded in ALAC, WAV, or AIFF formats will be transcoded to a separate temporary AAC 256 Kbps file locally, before they're uploaded to iCloud. The original files won't be changed.
  Songs encoded as MP3 or AAC that have been matched to the iTunes Store will be made available for download as 256 kbps as AAC from iCloud. 
  Matched songs in your local library won't automatically be transcoded to 256 kbps AAC. To get a higher quality transcoding, download the matched songs from iCloud.
  


So - your local songs won't change unless you delete them. The cloud will have at max, 256 AAC versions of the matched or uploaded songs. If you were to download the songs (after deleting your copy), you'd lose out in terms of bitrate for those songs greater than 256 (and win on saving storage space). Similarly, any songs less than 256 would win in terms of quality if matched and lose in terms of space needed.

Apple limits you to 25,000 songs that were not purchased from the store. Since they only upload a max of 256 AAC - that limits their storage commitment but there's no set size restriction other than max of 200 MB per track or 2 hours per track.