[thomasfoster96]

> So he resigns, but he was elected as a representative in the lower house. That means he won't be PM anymore, and he goes back to being a member of the lower house?

Yep.

> Does the house pick one of its own members for the job, or does the majority party get to pick anybody at all that they want to be PM?

In most countries (the UK included) the majority party will pick one of their MPs. Australia once had a PM die in office (Harold Holt) and have a person in the Senate picked as the replacement, so the replacement ran in the byelection for the previous PM's seat.

> Do PMs that leave go back to being house members? Seems like that would be kinda weird.

Yeah, but they've also been house members the whole time they were PM, so it's not that wierd.