Does the DiD Historical Aces checkbox function and make it so HA's can be permanently killed in a campaign?
Yes, but I believe that it applies to enemy HAs only. The ones on your pilot's side will remain until their actual last historical date.
Yes, exactly, only enemy HAs.
Are mortal friendly HA's possible?
I could've sworn there was a mod floating around for this, I just haven't been able to find it while searching.