Hello Pradyumna
Take a look at this diagram:
If R1 crashes, then R2 and R3 will be part of the backbone Area 0, but Area 0 will be discontinuous and will look like this:
Which is the discontiguous situation described in the lesson.
Yes, this is the case. What you are describing is this scenario:
However, the virtual link is always created between the two ABRs in the intervening area. So the virtual link in the above cause would be between R1 and R2.
I hope this has been helpful!
Laz