i read she spawns 1-3 minions from N-VD which are supposed to increase drop rates if you kill them, not sure if thats true.
the drop rate for weapons seems higher than armor. armor drops are pretty bad on VE-E and apparently don't become mutch better on higher difficulty unless you also kill the minions (all hearsay).
the already bad armor drop rate gets progressively worse the more pieces you already holding on to, i suspect that all 5 pieces share the same drop slot.
i've seen ppl claim they are already 400-500 runs in on E with TH (not sure whether it was 4 or 8+) and over 100 runs without a drop for the 5th armor piece.
while it is probably possible to merc it its not very attractive for either side. the one who's paying needs to actively participate to grab new KI and farm merits every 7 runs. for the merc it isn't very attractive either cause they don't know how many pieces the dude he is mercing for is already holding and therefore it gets difficult to name a fair price.
Yes, killing the Gyves makes the spite warden targetable/killable on N/D/VD (1,2,3 Spitewardens respectively). Yes, this is true, in the killing of a spitewarden gives you an extra drop slot in the treasure pool.