by Hermjard
Ad 1: From the rules: "When a player is eliminated, his hand, all of the cards he controls, and his deck are placed in their owners discard piles."Since a player does not control his cards, which he played as attachments on characters of other players, it would be my first impression, that these cards stay in play.
If the authors of the game meant all cards of the eliminated player, it would have been easy to write. Just replace "the cards he controls" by "the cards he owns".
Ad 2 and 3: Indeed, the term "elimination" could be regarded as equivalent to "removed from game". But the fact, that the eliminated player puts his deck on his discard pile, is a hint that this is not the case. Since, per definition, the cards of a discard pile are out of play, but not removed from game. On the other hand, cards, which are removed from game, are "nowhere" except removed from game. Therefor, a card, which is explicitedly put on a discard pile, cannot be removed from the game, because the discard pile is part of the game. And it's nowhere said, that the discard pile of an eliminated player is removed from game as a whole. Furthermore, it would have been easy to write in the rules: "All cards of the eliminated player, he controls, his deck, his discard pile and his hand are removed from game". Since this is not the case, I think, the phrase, that was chosen, must have some meaning.