I fell your pain. We're in the middle of a complete gut and remodel right now, though I didn't go all the way down to the joist on the subfloor. I have however removed everything in between the rafters and floor aside from studs, we've been living in it during the process as well and there have been times I thought I'd go insane.
1.) My vote is for plywood, here's a great article on the debate as well.
2.) I think your going to run into major problems trying to lift the interior walls, especially if you don't plan on replacing ALL the drywall. You would be better off just cutting along all the walls and leaving the sub under the walls, unless it's just completely trashed. That's a huge undertaking involving structural engineers, etc.
3.) Leaving the sub under the walls would take care of this problem, along with alot of electrical wiring having to be moved as well.
Like I said, I'm living through a big remodel right now, next up is a complete plumbing replacement in a house with only one bathroom! Luckily we have a full basement so most of the houses contents are crammed in it right now. Our kitchen at the moment consists of the kitchen sink (that's it,lol) with 2x4 legs so I could cut out the rest of the counters/cabinets and redo the drywall, wiring, etc. Our future bathroom is setup in the living room so I can preplan on all the measurements, plumbing, wiring etc. So I can have everything ready to go right back in since we only have the one bathroom, we'll be using a boat toilet while the ceramic is getting put down. So yes it will be rough and yes you'll find days where you want to severely hurt anyone within 5 ft. but it'll be worth it in the end (at least that's what my wife keeps saying, lol)