In settings you can set it to "optimise iPhone space" (also possible on a Mac in the photos app) which will automatically remove local copies of old photos from the device if space runs low, and then download them again when you open them. For me it works very well, though I have had some trouble where it seems to need a few hundred free megabytes to start the process. If you delete photos with iCloud photo library enabled, they will be deleted from all your devices.