When you consume one, does it live on in you? Or does it 'die'.

Your soul + dragon soul = your soul + dragon soul.

Wonder what happens if you absorb hundred or thousands. Power lust to the max ooorr.. do they just store up there and not do anything?

Originally when two dragons fight and one loses the losers soul get absorbed by the greater dragon, and originally said greater dragon would absorb more then the soul they would absorb the memories and powers of the losing party, of course I don't think thats entirely true.