>>does the address of the pixel vary or the value of the pixel vary.
Depends how you see this matter: let's assume the rotation center is the center of the image. So, rotating the image means the pixel p[x][y] will have the value that was allocated to the pixel p[x1][y1] - the value of the pixel vary. Or, the value GREEN that was on the pixel p[x][y] will be, after rotation, in the pixel p[x1][y1] - the address of the pixel vary () (I assumed "the address of the pixel" is the position of a pixel with a certain value)
>>when i rotate an image by say 45 degrees, then wont it fall out of the gird
If your image is rectangular, imagine that rotating it will change it's position on the screen like you will rotate a sheet of paper on the table. How will differ these two positions?