Good questions. I have been ignoring HTML5 on the basis that it is still in draft - and has been for yonks. OTOH, browsers are beginning to support elements of it - and so I had better start getting to grips with it.
As I understand it, localStoarage will allow database information sot be stored locally, encrypted in a cookie. I believe SQL will be used - I am not clear that it will be SQLite. As cookies can be deleted, I am not sure when it would be a good idea to use localStorage. I hope someone more knowledgeable than I comes along and corrects/enlightens.