Just remember this - flashable zips are packages used for writing to the system. System files exist in /system, and files it needs to boot exist in a boot.img. These things exist on your internal storage. A ROM is basically the OS, and everything it needs to boot and run. When you flash a ROM, you're taking files out a zip file and copying them to internal storage to replace whatever was there before (it wipes it out, first). Once that is done, the flashable zip is no longer used. It uses it once, then you can get rid of it if you want. Some people like to keep them around, though, because it's an easy way to fix certain problems. Say, for example, your ROM breaks some how. You can reflash the ROM, without wiping data, and you should be able to boot up again without losing apps or settings (mods will get wiped out).
Backups are entirely different. A nandroid backup is a bit for bit copy of all files on all internal partitions (or whichever ones you select). Once a backup is made, the system doesn't use it for anything. It's just in storage. When you need to restore a backup, it overwrites internal partitions with the contents of the backup. It's kind of like flashing a ROM, but in a completely different methods, and it includes much more (data, for example).
That being said, the system will only ever use system files on internal storage. It does not use anything you may have on the sdcard such as flashable zips or backups. They exist only as "copies" of things that belong on internal storage.
