Apple One Premier Family Plan

When you share iCloud Storage, everyone in your Family Sharing has access to the storage. If they currently have only the 5GB plan, they are automatically added to the shared plan but if they are currently paying for a larger plan, they have the option to continue with their current plan or to switch to the shared plan. The only option that you have is to share or not to share -- you can't select only one family member to share with.

Also, everyone has access to all of the unused storage in the shared plan. There is no way for you to allocate how much storage each person gets.

Yes they do. Their storage is still under their own Apple ID; only the amount of storage available and the billing change.

Also see the following from Share iCloud+ with your family - Apple Support

When you share an iCloud+ subscription, everyone in the family group uses their own account. That way your photos, documents, and other information stay private, even though you're sharing access to the service. You simply share the features and space available in iCloud+ with your family members, so you only have one plan to manage.