Yes.
The cache size is what is stored locally. Setting that to "fixed" type would hard limit what was available locally.
As for what size is ideal? That entirely depends on what you're doing. The cache is adaptive, so it should attempt to keep frequently used data in the cache. But if you're accessing different data frequently, then you would want a larger cache, to reduce bandwidth usage and API calls (eg, load).
But it this is for media usage, then "more is better" definitely applies here.
