As promised, here is my reply to your questions. I have tried to answer them as fully and correct as I'm familiar with Apple Music.
Ok cool. So am I correct in saying if I upload a cd to Apple Music it will match it if it's in the store catalogue and if not it uploads it.
That's correct
I uploaded a cd today and I checked the store and the same album. Was there on the store so I'm guessing this was matched.
No, not the store. There is a difference with Music and iTunes Store.
Not all songs that are available for purchasing in iTunes Store are available in Music. This is because some labels and artists are still in talks with Apple about licensing for streaming. And some labels and artists simply refuse to make their music available for streaming altogether.
Also the iCloud status for this album appeared as Apple Music is this normal.
Yes, this is the way it is supposed to be.
Also what happens to your original songs if your Mac breaks down and you no longer have access do you essentially lose your original music
First of all, I highly recommend you to make backups of all important data. This includes also music.
But we're all humans and data is fragile and can be lost, even backups.
In case this happens to you, which I wish for nobody, obviously, iCloud Music Library has you covered.
All songs are stored in their servers and you can download them back to your computer or Mac whenever you like.
But here is the thing, Apple may provide you with a backup, but because it is a profit based service from Apple, they put DRM on songs you download back to your computer. Only music marked as 'uploaded' in iTunes is an exception, because those are your own songs which Apple does not have in their database.
If you don't want DRM on songs, they offer iTunes Match. All your music is available for download without DRM. An other amazing service from Apple's side with iTunes Music is you could upload music with the worst bitrate or even ripped from cassette and they will replace it with their own high quality 256 Kbps m4p version. Amazing, isn't it?
You can read more about iTunes
here
Music is essentially the streaming service based on iTunes Match with DRM added to it.
Also all my purchased songs are showing as purchased not Apple Music or uploaded only songs I make available for offline listening are labelled as Apple Music but I never get any songs saying matched only purchased or Apple Music or uploaded
Matched is no term used in iTunes. They use the term Apple Music for matched songs.