1. Nah. That's got nothing to it but gameplay induced weakness.
The nature of the gods, whether et'Ada, man or mer reaching apothesis, or even the man-god Vivec, have a certain resistance to time, including the results of the Dragon Break and to similar temporal anomalies. There's something about them that is http://www.imperial-library.info/tsomw/mw_18.shtml (thanks, that's an excellent link). We know this aspect applies to even the greatest Dragon Break because, as least as of Morrowind, a partially divine amulet http://www.uesp.net/wiki/Lore:Where_Were_You_..._Dragon_Broke, with even the Elder Scrolls unable to perceive the time correctly (the exposed and soul-trapped souls within may have helped, but that's not clear).
Unlike nearly every other being in the Daggerfall portion except the Underking (who died/regained his soul/ascended completely, making his result moot) and possibly some Daedra, at least part of the King of Worms had to be separate from and simultaneously existing with the other timelines as soon as the Totem was given to anyone. Aedra and ascended beings are mutable, but they can't disappear or only exist in one point and not points in time after that point: even 'killing' them typically involves merely transforming them to the earthbones or transmuting them beyond their original aspects.
Might just be gameplay, so the console fanatics don't whine when the bad guy sends thirty zombies at them, but it's not hard to create a situation that reasonably explains the gameplay.
3. Huh what? That was the faith of player if he didn't give up the totem.
4. That was a three-way clash between Daggerfall, Wayrest, and Orsinium.
The stomping was only explicitly occurring to the character in Daggerfall, but giving the totem to any party but the King of Worms gave someone that didn't like him a massive, superpowerful, magical weapon. This is not, per say, great for his health. At least one of those timelines involved the Emperor completely overtaking the entire area, and having no small reason to aim for the King of Worms himself. There's nothing explicitly stating he got the crud beaten out of him, but the possibility in at least one timeline is not an unreasonable assumption.
Hah. Even if he is the god, he can still come back.
The god-part is stuck as the Necromancer's Moon, and whatever rare manifestations it can provide. It's not even as powerful as Arkay, so it's unlikely it can pull off the serial reincarnated avatars Lorkhan managed. It may not even care about what happened to Mannimarco, or the Mage's Guild, with how important belief/worship is and how seldom "caring" and "necromancer" fits together. The un-ascended parts are still normal, if extremely powerful, mortals.
He could probably still come back
anyway (can you say Lich King of Doom), but for different reasons.