Apple - With New Photos app on Mac, how do I manage photos on my iPhone?

The default behavior is for iCloud Photo Library not to store full-size versions of your photos on your iPhone and iPad:

The theory is that only thumbnails are stored on your iPhone/iPad until you decide to view/edit/share the photo, at which point a device-optimized or full-size version of your photo is downloaded from iCloud.

(Note: I know a full-size copy is downloaded when you edit/share, but it appears that if your iPhone has plenty of space it will download a full-size copy for viewing as well, as opposed to just a device-optimized version. This is likely to avoid having to do a second download later if you decide to share the photo.)

When you start running low on space, iOS will begin pruning less-accessed photos and return to simply thumbnails or device-optimized versions of those.

All of this happens automatically in the background and you shouldn't have to worry about managing space yourself.

iCloud Photo Library doesn't support doing that. All your photos have to be on all your devices where you've enabled it and deleting a photo anywhere deletes it everywhere.

Unless you have a huge library, it shouldn't be a big issue. My library has 11K photos and 300 videos but only takes a little over 2GB of space on my iPhone. The total space used for photos & videos might actually go down as full-sized images taken on the iPhone or synced to it get replaced by "device-specific" resolutions.