You should obtain an ID card, and if you decide to stay in Poland then you should register yourself a Polish citizen. This will solve most of your problems.
You can't get an ID card as an EU national - we get a piece of A5 paper instead.
The question I have is, Do the Police always make foreigners pay on the spot? can't I get a ticket on credit like natives? I have residency here, pesel, NIP etc... but no ID card.
The law is a mess with this - my understanding is that they cannot force someone with valid Polish residency to pay on the spot - but the amount of hassle involved to prove your residency makes it probably easier to simply pay on the spot rather than have to wait around while phone calls are made, etc, etc.
I don't always carry 500PLN around with me to pay off Police so what are my options? Next time I get pulled over short of 500PLN will I be taken away to prison if I can't pay immediately?
No, not neccessarily. They can escort you to the nearest cash machine, or if that fails, they might be happy to take you home so you can get the cash. Or of course, they might just give up trying to communicate with the foreigner and let you go - but generally speaking, there are options. But as with so many things here, it depends on the mood of the officer on the day - but you can certainly be taken to the nearest cash machine to pay up.
Be warned - if you gave them your PESEL, then you'll have points added to your licence. The Polish system links penalty points to the PESEL rather than the licence - which is how they can ban foreigners without much fuss. Whether or not foreign countries will recognise a ban for running up points is another question.