UPstate: nothing you said is simple. First off, the Challenge team is guarenteed a spot in the Premier league. The Premier team (I hate those names) is not, even if they get third place. Only the top two teams are guarenteed Premier league.
Now, that being said, if both teams somehow make it into the Premier league then I would think that CESA would keep the teams mostly the same. However, if only the challenge team gets to play Premier then the club has a dilemma on how they should staff that team.
They do, as you have said, have the option of dropping the Challenge team out of the Premier league and pushing the Premier team up, but in my opinion, if that is the option that is chosen, would be the most unfair thing I have ever seen done to a group of kids.