Personally I think that the reason Thrall are used is because they're easier to do. It's allot easier to make thousands of stumbling corpses than hundred full health human warriors.
Secondly I believe Connacht died, was ressurected and then possesed by the Leveller.
However here is how I see the resurection of Moagim, Connacht etc. The Person dies, their soul leaves the body. The body is then given a new soul by the Necromancer, but since the body still retains the Memories of the original soul the differnce is none.
Perhaps when you reach major major major power (even greater than Calleach) then you can ressurect beings by extracting their souls form the Myth heaven, the full extent of the Dream of Unlife has not yet been seen.
The Name "Dream of Unlife" was given to it by Scholars when they saw what was done with it, giving undeath, unlife (lets NOT go into the Undeath unlife technical discussion again), however it may be more of a Dream of Life, If used for less evil means.
Ether is The regions of space beyond the earth's atmosphere; the heavens.
I suspect what they intended to convay that her soul was removed from her body, but did not go to "Myth Heaven/Hell" and was set adrift in between.
-zeph