Full Google apps access to location needed for maps with GPS? I have a HTC One S with Android 4.1.1 installed.

I recently got the "google settings" app and checked the settings in there. Under the field "location" is a switch to "Let google apps access your location" with a note that apps may access your location while the app is not being used.

If I switch that off, the GPS is not activated when I start google maps - and therefore renders it pretty useless for me. I even get a message telling me to switch google location on if I want to have a location based map. So here is the question:

When this setting is switched on, do I risk that other apps (google search or whatever else I have installed from google) will take my location from the Wifi connection or cell tower and transmit it to google for storage, or even the GPS data?

Is there any way to enable GPS in maps but not my location for all other apps, too? I am worried that the setting is a "Either you do not use Google maps, or we will know and record whenever, wherever you are". Is that the case?

I have so far only this question here but it seems to say there that the google location service does not affect GPS - but for me it does.
That strongly depends on the app used. Unfortunately, since Froyo (Android 2.2) the options "use location service" and "permit Google to collect" are connected and undividable (before you could chose them separately). So if an app uses the Google Framework's location service to obtain position data, it won't work without that service enabled. If it accesses GPS itself, it would work with or without.

Only way out of this trouble would be to root the device, and then use a permission protector like e.g. LBE Privacy Guard or PDroid Privacy Protection / PDroid Manager, which let you decide on a per-app basis which app is permitted to access a service/certain data (many possibilities here, not only location).