Hi Uncle Davy,
You are quite correct in the assertion that wholesale will always give you much better value than drop-shipping and that's for one very good reason. With drop-shipping the risk is low to zero, with wholesale the risk is much higher because you are having to outlay far more cash up front.
The bigger the risk, the more potential reward awaits, that's how this market works. After all, if everyone could just drop-ship a single product risk free and get the exact same value as someone spending 10K on buying wholesale, then everyone would stop buying wholesale and simply eliminate the risk completely buy drop-shipping.
In regards to the fulfillment questions, I don't have any personal experience. That said, I can confirm that with fulfillment, you have the products sent directly from your supplier to the fulfillment warehouse. They then store, pack and ship your items from there, so you don't have any involvement in that process.
In regards to checking products, I don't think they provide that level of service and doubt they would, but you should check with them directly to find out if that's possible.
In regards to shipping, I know that Amazon offer their Prime customers fee shipping options, so no doubt they would be using their own contracted shipping company for that. Is there other shipping options available, again I would doubt that, it just makes their job harder so I can't see anyone offering that, but again, it doesn't hurt to speak with them directly to find out what your limitations are.