yes, a DB for use with Connect may be local or remote. However be aware, that many DB requests will be fired by Connect, and so a slow network connection will have an impact on the Connect performance.
Regarding ALWAYS-ON I need to forward this question to our DB experts.
I meanwhile got a reply regarding the ALWAYS-ON feature. Unfortunately I cannot confirm this. Chances are very high, that it will work, but it has not been tested by our QA. So there is no official statement about this feature.
If this is a requirement of your customer, then could you please contact your OL representative and escalate it.