Hit points, at least as described by Gygax, are neither physical nor non-physical. They're not a measure of any ingame quantity, because - as Gygax makes clear - they're not part of a process simulation (the "not proportional" comment is enough to show that; the "hit location is not germane" reinforces the point).
As previously mentioned, some pages back, Gygax's game does not meet the strictest definition of an RPG, by the standards of the modern era. I try to not judge his statements too harshly, since those were primitive days, and he was making up everything as he went along. As I understand it, he was more or less removed from the project by the time 2E came around, when designers actually started caring about role-playing as its own virtue.
And what about all the other participants in the fight? Were they frozen in time? And then, when they take their turns, what about my PC who acted before them?
No, they are also performing their actions over the course of the six-second period between their last turn and their next turn.
And to answer your next question, about how we know whether someone would be affected by this spell, when you cast it into an area that they were currently in the process of moving out of - that's where initiative comes into play. The reality is that they are
somewhere along their course of motion, at the point when you cast that spell, and if your turn came along first then they were not far enough along their course in order to clear the effect by the time your spell goes off.
It's an approximation of reality. It's a simulation. It's a simplification. Just as the Navier-Stokes equation simplifies down to Bernoulli under certain assumptions, and this is sufficient to build a functional aircraft; so can a fluid combat scenario be described using a manageable collection of game mechanics, with a meaningful outcome derived. The more complicated you want to make the equations, then the more accurate your final answer will be, and the more difficult it will be to reach.
This can't be literally true - after all, choosing to pick up a die is not making a decision as one's PC would. So the question is, how is the metaphor to be cashed out?
Picking up the die is not a
decision. You're not making a
choice about what happens to your character, or about anything else within the game world, and thus the possibility of meta-gaming is never called into question.
If my PC really wants something, and is putting all her effort and all her hope into it, and at the table I spend all my fate points and cash in all my inspiration chips, to me that looks like I'm making decisions as my character would and exercising my character's agency.
You can't
choose to be inspired, though. You can
be inspired, surely enough, and a reasonable game system may well include mechanics to that effect, but it's not a
choice, any more than you can
choose to be hungry or afraid.
An argument could be made for the player being in a better position to know how their character should feel about stuff than the GM does - while you
are the character (or "channeling the character", as some call it), then you
should know when you are
actually inspired. The temptation to meta-game would be present, and it would require the player to take off their PC hat and put on a GM hat for a second, but as long as the player is being honest, then it could potentially work out. (Fate points are a bad example of this, for other reasons which are only tangential to the topic at hand.)
If players don't have luck-type mechanics (be they hp, fate points, re-rolls, whatever) then the metaphysics of the fiction are the same as the physics of dice - cold, uncaring randomisation.
So you have to ask yourself, do you want to pretend to be a real elf, in a world where dragons and magic are actually real? Or do you want to pretend to be a character in a story, where dragons and magic are plot contrivances? Because you can't be both at the same time.
The premise of role-playing is that you're pretending to
actually be an elf, and you can't do that while you're simultaneously
choosing to invoke fate or luck or whatever. That's not a
choice that the
character is in any position to make; nor, in the case of passive mechanics, is it a
fact that the character can
know.
