HOTSPOT
You manage two cloud services named Service1 and Service2. The development team updates the code
for each application and notifies you that the services are packaged and ready for deployment.
Each cloud service has specific requirements for deployment according to the following table.
In the table below, identify the deployment method for each service. Make only one selection in each
column.
Answer: 
For Service 1 , to have the package locally updating – Hopefully you have kept previous copies of the package to redeploy and would mean it could be re-deployed elsewhere if the site goes down, I guess. Better options out there
For Service 2 , Once deployed to the storage forget it..?
Strange question..
This seems wrong, it should be the opposite.
Service one should have its packages from Azure Storage for disaster recovery, having it locally means if something goes wrong with the local computer, you will loose the package.
For service 2 it should be from local computer or even updating it manually through RDP
I agree with you
For me the correct answer is :
Service 1 : Update by using package in Azure Storage
Service 2 : Manually update DLL on cloud service by means of RDP