ok, i just got off the phone with an MP specialist. After talking with him for over 45 minutes, i am now an expert on MP.
As it turns out there are TWO phases with MP. I am in the first phase, just being enrolled on Monday. In phase 1, you can use Paypal as an automatic payment method, to pay seller fees etc. After my next billing cycle ends, which for me will be July 15, i will enter Phase 2 of MP.
At that point you CANNOT use Paypal at all on MP, not as a primary payment method nor as a back up method. You can only use a bank account or credit card.
The reason i could not find what i was looking for in my original question, is becaue i am in Phase 1 still. I wil be notified by email when i enter Phase 2 (although it may not be called that in the email) and at that point i can set up my bank account as my payment method.
What could be simpler? lol.