When you create it for 1000, does that make each column UPTO 1000 bytes or does it actually set each column at 1000 whether it has that much data or not?

I said 1K, not 1000. 1K is typically 1024 when you're in a programming context (its metric 1000 for everyone else).

If you use varchar(), it will only allocate the space it needs.

If you use varchar(), it will only allocate teh space it needs.

Or text columns which can handle much larger numbers of characters than varchar; although I want to say creating indexen on text columns had issues at one time (either didn't work or was much slower than indexing a varchar column).