About lightmap blending. Whenever you have static actors (UE4's name for objects) in a scene along with static or stationary lights you can then generate a lightmap. That's a texture that contains the lighting of an object so that lighting doesn't have to be calculated every frame. But if you want to have day-night cycle with lightmaps then you need lightmap blending. This feature allows you to build lightmaps for every time of day (at least about 8 stages at max) and then blend between them. In the end your lighting will look much more detailed with potentially better performance.
Which cutscenes? What are you talking about?