Gary,
You can't send Microsoft the SQL database (as of now). You have to do it programmatically.
You can use SharePoint on premise with CRM Online. Given the 70GB of pdfs that would be my recommendation.
Yeah, I don't loose any sleep about backup. Tornado forecast for Kansas City, I don't worry about the office. All our mission critical data is in the cloud better protected then we ever could locally. Unless I moved our servers to one of the underground data centers we have here.