The slide posts and slide images are separate pieces of content. The slide images are stored in your media library and if you delete the slide posts, the slide images are still in your library. Same with the images, if you delete a slide image, you still have a slide post without a slide image.
So if you want to get rid of the extra copies of the images, you can delete them from your media library and upload a new one, you don't have to delete the whole slide post and recreate it.
What I meant by the blog posts, is that when you set a featured image, the media library gives you extra options for the images, like alignment and size, those don't effect the featured images that you set as your slide image. That is really a functionality issue with WordPress, those shouldn't be there. If you choose a different size like medium and click "use as featured image", it doesn't use a medium image, it uses an image that is the size you set in the slideshow dimensions, 10000x10000px.
The slideshow is shrinking because it is way too large to fit on your website, so it scales to fit. You shouldn't use full sized print resolution images. The theme you are using has a fluid width, but the content area is never wider than 463px, so you should set your slideshow dimensions to match that, maybe 463x352px.
And the slide images should be sized and cropped in an image editor to fit those dimensions before you upload them to get the highest quality results.