Hello @Dinnemidi Ananda Kumar thanks for reaching out.
For questions 1 and 2, indeed you will have a constrain when using basic SKU as currently it gives you 2GB of storage. I would recommend the Standard SKU as it will give you 25GB of storage per partition, that way you can start with only 1 partition and if you need to later scale out then you only need to add another one.
As for indexing large data sets efficiently, Standard SKU should work for you based on your storage requirements, however, depending on the desired indexing speed you might want to look at this documentation as it gives you a guide on the different approaches to optimize for indexing throughput, either using the Push API or using Indexers.
As for Open AI integration, you can use AI Search with the AI on your data tooling one of the highlighted recommendations is to enabled Semantic Ranking to improve the precision of the retrieved results, taking into consideration to potential pricing increase that comes with the features.