It doesn't know which files exist on the server.

And the file can change on the server just as easily as the client. So how can it tell this without sending the complete list?

Yes in the general case. But in the case of a backup that's done daily the sender can say... there are all the files that changed since we last did this.

Rsync is designed for the general case. It's useful for backups, but not designed for them.

In this case, I think you want to be using unison rather than rsync.

rsync already supports that. It has an "offline"/"batch" mode - you can generate a diff, only send that, and apply it at the other end. However, you are unlikely to save any traffic that way. rsync is super efficient and does not necessarily send complete directory listings.

Yes, but rsync doesn't store any state for each xfer.