You can think of the app.yaml as your webserver configuration. The web server can serve static files do many things much faster if it doesn't have to invoke your application python code. It that way it's best to set your static file urls and caching expriation in your app.yaml file rather than your urls.py or settings.py or views. This is the same for deploying a django app with lighty or apache.

In terms of the debug in development versus production, I think the best practice there is to make a deploy directory which contains a deploy.py to write an app.yaml file out for production or local development. You can use python's built in string.Template module for that. You'll want to add the deploy/ directory to skip_files in your app.yaml so it isn't deployed to production though.