I\'m trying to implement a cluster using Erlang as the glue that holds it all together. I like the idea that it creates a fully connected graph of nodes, but upon reading differ
Yes, you can send messages to a process on any remote node in a cluster, for example, by using its process identifier (pid). This is called location transparency. And yes, it scales well (see Riak, CouchDB, RabbitMQ, etc).
Note that one node can run hundred thousands of processes. Erlang has proven to be very scalable and was built for fault tolerance. There are other approaches to build bigger, e.g. SOA approach of CloudI (see comments). You also could build clusters that use hidden nodes if you really really need to.
At the node level you would take a different approach, for example, build identical nodes that are easy to replace if they fail and the work is taken over by the remaining nodes. Check out how Riak handles this (look into riak_core
and check the blog post Introducing Riak Core).
Nodes can leave and enter a cluster but cannot be part of multiple clusters at the same time. Connected nodes share one cluster cookie which is used to identify connected nodes. You can set the cookie while the VM is running (see Distributed Erlang).
Read http://learnyousomeerlang.com/ for greater good.