how does screen resolution influence positions in unity?

I probably didn't phrase this right, but I'm having some trouble wrapping my head around how screen resolution is handled with respect to where you place your objects.

Maybe these questions will help me clarify what I'm trying to say:

1. How do people organize object locations and map size when the resolution differs for the user?

2. If I have a 32x32 sprite on a 1920x1080 resolution, how is that sprite changed on a 1280x960 resolution? Does it compress? Does the screen size simply shrink and you see less of the map surrounding the sprite?

3. what is the relationship between pixels and resolution?

4. How do developers set a size for the screen? ie, if I want a level that's 1000 pixels wide by 1000 pixels high, what is the best way to achieve this?