Hi @kalamazandy,
I totally understand your issue. Even I use a cloud subscription to which I sync my files in realtime and so filesize and bandwidth becomes a problem.
From what you are telling, I can understand that you want to keep all your data in your master blend file and link an entire collection, change a few things as necessary while still being able to update your master blend file, and have all those changes reflected back to the linked file. And do all this while retaining your collection hierarchy.
You can do this, but there are limitations on how far you can go.
- You can link a collection as an instance as usual.
- If you want to re-position or make changes to individual objects within the linked instance, you can make a library override using Make Library Override operator. This will let you override all the ‘Object’ properties (not Object Data) so that you can move things around, change draw type,etc. while leaving all the original mesh data, materials, particles intact. So when you change a particular object in you master blend file, it will update in the linked file as well, plus, the changes you made in the linked file will be intact with your hierarchy in place.
- If you want to make changes to materials, you will have to individually go ahead and make a library override of the Object Data to which the material is linked and then override the required material and make necessary changes. You can make changes to particles in a similar fashion. Individually overriding a data block is done by shift-clicking on the chain icon in the properties window. Any changes you make to the geometry in the original file will still be reflected back with all your material (or particles, etc.) changes will be preserved in your working file.
- If you want to change the geometry itself in the linked file, you have individually make the respective data-block local by clicking on the chain icon (without shift). But, this object will no longer update on changes made to master blend file. But still, I assume, if you haven’t overridden materials, those will be propagated from the master blend file.