Fundamentally all you have to do is point the CS at the cities, find the rocks, click on them, then hit delete.
Why would you tell someone to simply delete a vanilla reference? You of all people should know that this can cause problems with the game, especially if they later add a mod that makes an edit on that reference. The safest way to have something not appear in the game is to simply check the Initially Disabled box. The object will still be in the game but it won't be rendered during gameplay. Either that or bury it beneath the surface where it can't be seen. Simply deleting something from the game is a recipe for crashes and other problems.
Yes. They should be disabled and moved (very, very far) below ground, not deleted.
You don't have to do both, either method will work. If an object is disabled, it simply won't be rendered into the game. And it's really not a hassle to click on the "Initially Disabled" box when you're in the CS. It's certainly less work than deleting the reference, and afterwards using Wrye Bash or TES4Edit to "Undelete Reference and Disable"
It is also a lot faster to just hit the delete key than it is to double-click the rock, type in -30000 for the Z position coordinates, check the Initially Disabled box, and exit.
Again, you don't have to do both. Checking the Initially Disabled box is all you need to do and is certainly the easiest way to do it. The only drawback with that approach is that the object will still be visible in the CS, and if you're trying to change something in that space it might get in your way. In the case of those large rocks though, that shouldn't be an issue. It would be however if your were trying to do something like unboarding a building to add an interior. In that case it would be more convenient to bury the boards so you can get at the door behind them.
I could be totally wrong here but don't some of those rocks cover inactive oblivion gates?
No, all Oblivion gates are Initially Disabled, and activated by means of a script at a certain point in the game. There maybe a few rocks though have a gate sitting on top of them, so you don't want to disable those. Unless you really like the idea of having an Oblivion gate hovering in mid air. Besides, you can see all that in the CS so you just need to avoid those particular rocks.