What login option to choose when using Google Accounts For Education with the google management software.

I'm setting up 20 Chromebooks for a small private school and it's a first with Chromebooks and the chromebook management software for me.  What I'm trying to figure out is this...
They thought about assigning one Chromebook to 3 students but the other option (easier) is to allow any student to log into any of the Chromebooks.  The problem is I'm concerned the 16 gig drive will fill up if people start keeping things in the downloads folder and/or if user settings are stored locally.  Is there a way to keep this from happening?  Each student will have there own login credentials and google drives under the GAFE account.

We want to utilized the Monitoring and Reports options that is available through the management software. But, I also see that I can't enable the option "Erase all local user info, settings, and state after each sign-out" otherwise the logging won't work and this where I'm stuck.  Not sure how to get around not being able to use the Erase all local user info at log off option yet not have to worry about the drives filling up if a bunch of students log into the same Chromebook.

I started looking at how the "sync user settings and data" option works but I'm still unclear as to the best option for this sinario.  

Thank You!