The file system on iOS is a bit weird, since apps are all sandboxed. But it looks like it can access the public files of apps on your device, and I think there was an "On this iPad" tab in sidebar.
I would imagine that you could save locally too (don't know for sure), but I mean, they upped the space for both models and have a high-end model with 512GB of space. I'm guessing that's not for simply storing more Photos and Video.
