Withrdawing bitcoin from web-based exchange wallet to local wallet. My wallet passphrase is requested- is this necessary? I understand (maybe incorrectly) this is the seed passphrase/ the 12 words generated when wallet is created. Is this normal to provide this information to the web-based wallet when sending it, to receive it in a local wallet? 

When withdrawing the funds from the "cloud" wallet to my local wallet.. wouldn't providing my seed/passphrase be a security flaw as a wallet can be recovered from it? Or am I interpreting this as the wrong passphrase...? I am using Electrum as my local wallet.
NEVER share your seed pass phrase/mnemonic. Anyone that has it can steal your bitcoins, and there is NO reason a web-wallet would need it in order to transfer your funds. 

If the web-wallet is requesting a password in order to withdraw funds, it is most likely the password to log in to your web wallet account, or a secondary password you set up to spend funds from your web wallet account.