1. They're offset inward, so 40mm is 1/5" closer to the car than 35mm. (or 35mm sticks out 5mm more than 40mm)
2. It's not about looking flush, it's about keeping suspension geometry correct. Don't change the offset more than 2-3mm unless you know what you're doing. Depending on the brakes/wheels, there might be clearance problems with different wheels, even with the same offset. I think in the Cruze world, the brake clearance problem is mainly on the 1st Gen diesels.
2. It's not about looking flush, it's about keeping suspension geometry correct. Don't change the offset more than 2-3mm unless you know what you're doing. Depending on the brakes/wheels, there might be clearance problems with different wheels, even with the same offset. I think in the Cruze world, the brake clearance problem is mainly on the 1st Gen diesels.