Physical change is what is understood by practically everybody that believes in this doctrine. I just read of a famous physicist (Fred Hoyle, IIRC) who went to the effort (as a boy) of saving some of the eucharist in his mouth to take home and examine by microscope to compare with living samples. He was, of course, dissappointed to find that it was not transubstantiated physically.
Couldn't tell you what the Catholic on the street thinks, any more than you can, I guess. It is a substantial presence which is a technical term requiring some grounding in Aristotle, Aquinas, and the rest to get a handle on. It is not surprising that there is confusion about this teaching.
...and wouldn't this be a form or cannabalism?
Well, that was clearly the problem the Jews had when Jesus talked about it, as the Gospel of John says. It was also a problem for the Romans in the second century, according to the apology by Justin Martyr. It's one of those weird, impossible things the Christians have always taught, like that a man could rise from the dead.