The golden skull thing is known, but that is at least entirely cosmetic. The Angel of Fear thing is also known, but is slightly more problematic to say the least. They may share the same underlying problem of calculating when a character is dead, but we won't know until we find out what the exact bug is in the code.
It depends on the shield. If the reflect damage is from a Void Shield, that damage has a chance of removing beneficial effects, which means the reflected damage would be lethal to a 1 HP character.
While the general gist of your thoughts on PVP is pretty spot on for those who want to compete at the top, I don't think it paints a fair picture of the value it brings for everyone. For example, if you only care about the prizes in the top 25,t hen sure, there's a lot of demands to be the top of the pile... but that's discounting all of the rewards you can get from earning Iron Coins, which doesn't require nearly as much investment (although still some skill and time each week). Skill shards and legendary souls can be earned this way, and this week we added the ability to earn potent talismans for a limited time, and in the future we will have the ability to get certain characters unique to participating in PVP... there's lots for people to be able to earn with combat that evolves and plays differently from the other features in the game, and we are planning on adding more, too.
That said, this feature definitely has been designed with rewarding highly-engaged play in mind. However, this is just one addition in a long roadmap of features we want to introduce. We've definitely taken the praises and criticisms in mind from all of you as our community, but ultimately we want to refine PVP with that in mind and look to have future features that help scratch competitive (and cooperative) itches with differing level of engagements.
I guess the tl;dr is we respect the criticisms you have, but we want features to excel at rewarding certain kinds of players while still having something for other kinds, and future features will spread the love around.