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How do payouts work? Is it all onchain or is lightning supported? I can't get a gauge for what potential return on bids could be, but assume it would be small utxos?
  1. payout format varies by mining pool
  2. onchain
  3. you can adjust your minimum payout at the pool, as you see fit
For #1 - most pools (Braiins, Luxor, F2Pool) use full pay-per-share (FPPS) format, or you could mine with ckpool for a solo mining experience.
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Use LN and get free daily payouts. Sweet.