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1.What are my options with SPD 2013 If I want to change file permission in a workflow?

2.Where does SPO host 2013 Workfows?

3.If connecting to SPO Can I use Worklow Manager 1.0?

4.Will I need to host my Workflow Manager workflows on server or Azure if running against o365/SPO?

5.If I wish to create SPO 2013 workflows with Visual Studio 2012, what do I need and will I be limited to actions I see in SPD 2013?

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SharePoint 2013 workflow for SharePoint Online doesn't support management of list and document library permissions. To change permissions from workflow you can use 3rd party activities. For now I know only Workflow Activity Pack for SharePoint Online, developed by my team.

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