However even with "vacuum full", the old rows will be removed completely from the storage , but the new rows will always be there with the 'dropped' column still existing under the hood along with the table storage, with just carrying "null" values in it. […] Is this understanding correct?
No. The table rewrite process involves creating new tuples that exactly conform to the current row specification. The potentially non-null data present in live tuples for columns that have been dropped are not copied into the newly constructed tuples.
