I think the part you are missing and what Whatsapp's engineers are referring to is Google storing all your private conversations and data mining them for information to target you with ads. Whatsapp does not store your messages.
Whatsapp does store your messages. Try uninstalling the app, clear the app cache and reinstall it. You will be provided with an option to restore your chat history. I think what they don't do (at least promise) is not mine the chat conversations.
Curious. I wonder how far back it goes.
That's fine that it doesn't. It has other severe issues, about which users aren't notified in Whatsapp PR talk.