This is a primary game mechanic. Enemies can be knocked unconscious by drugs that are thrown on them. There are a few other ways to apply the "sedated", "unsteady", and "confused" statuses.
The player characters mostly use magical weapons that resemble guns but are suggested to be non-lethal and only knock out their targets, however many opponents are armed with real guns and will shoot to kill if they have the opportunity.
In the sense that the characters occasionally acknowledge (usually during dream sequences) that they are fictional characters in a computer game. They never directly address the player.
Ambiguous. Some of the player characters are implied to be LGBT, and depending how your game goes they'll die at some point, but they'll still be alive at the end if you make it that far.
This is one of those cases where the fantasy genre makes the answer complicated: nearly all the major characters die at some point in the story, but are subsequently resurrected. All the major characters are alive at the end of the story. (Unless you count the main villain, who may or may not be permanently dead depending on the player's choices.)