Re: Now To Update Images
It is not as simple as to copy images to that directory. XC works from var directory so all images are generated in there with different dimensions - so they are served with exact dimensions where needed instead of html scaling.
The product_images table in the database also lists all images, their dimensions and size. So this is something to correct as well.
Redeploying the store will not do anything to images.
Try the "generate resized images" under Look & Feel / Images Settings. However this may only generate the needed images in the var directory and not update the database with proper info. So you may need some custom coding to run a process to properly update the product images table info.