Unfortunately, according to enotes regulations you are only able to ask one question, so I have chosen to focus on your final question, which looks at what is implied about human psychology in the face of death. This can be a somewhat confusing story to follow, as it contains flashbacks, change in point of view and a huge dream sequence. What is key to realise is how the majority of the story occurs in Peyton's brain in a matter of seconds. In reality, the final memories he has are expanded massively to fill those seconds, and the real "ending" of the story occurs before:
As these thoughts, which have here to be set down in words, were flashed into the doomed man's brain rather than evolved from it, the captain nodded to the sergeant. The sergeant stepped aside.
And so, we discover at the end of the tale, Peyton Farquhar dies, with his neck broken, hanging from the Owl Creek Bridge. However, what the lengthy escape narrative reveals is that the terror of imminent death heightens our senses, distorts perceptions of time, and creates fantasies of escape. This is what is celebrated by this story, and this is perhaps why reading the ending of this story is such a shock - we all want to believe that Peyton Farquhar escapes, and reading the reality of what really happens shocks us because we become aware of the way that we can be misled by our minds in the face of imminent doom.