I really need the third row seat, but can see how some people don't need it at all and would rather have more cargo space. Regardless, if there is a third row seat, I sure hope they fold down to give us some cargo back there.
I too would expect that the 3rd row to fold down flat, since Elon mentioned that feature early on. I'm fairly confident that the seats will fold down, including the 2nd row. However, if you don't have the optional 3rd row, I would expect there to be extra cargo space below the "floor" where the seats would fold into. So, if more cargo space is preferable to 3rd row, you shouldn't get this option.