Syncing and downloading are definitely not the same thing. Syncing is fast and takes place wether or not the iPad is being used, downloading is much slower and implies the iPad is actively being used and instructed to download. On my local network I just have to fire iTunes and instruct it to fill the iPad with intelligent playlists and mixes created automatically by iTunes. If I want to change a selection, I am activating another playlist. There's almost no manual intervention there. It is much slower than through USB, but I don't care much as syncing implies that I am sitting and not as in a hurry as downloading on the iPad itself.
Having so long a gap between songs played from the cloud, either streaming or downloaded as needed, is definitely not transparent. I am not telling about a one-two second gap, but most often fifteen to thirty, to the point I wonder if the Music application has crashed or not, since there are no actual signs of an undergoing operation, should it be a spinning wheel, a sound, etc. The play time indicator just stays at 0.
When you delete a matched song from your library, it remains available in iCloud. If you re-dowload it, it will be in the AAC-matched version, along with correct tagging. This was my primary motive to get iTunes Match, as I got fed up trying different retaggers that never quite worked. The second one was getting better versions of existing songs without having to look for them one by one, but let the system do its job by itself.
It is strange, indeed, that Apple haven't thought to make playback gapless.
I can see what you are saying, but in practice there is little difference for me. If I change the playlist I have synced chances are I am going to initiate the phone to sync right then as well to make sure it is up to date. With wifi sync in theory they should sync all the time, but in practice none of the 4 active idevices we have in the house actually do. I don't particularly find usb sync that much faster than downloading, but then I'm on a 30Mb line.
I don't know what issue you are having with gapless playback; my cloud playback is gapless unless there is very poor cellular signal.
Match will replace your songs, but it will not replace the metadata. Apple was very clear about that when they released it.