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It did not appear to for me. Back when this was first unfolding I tried running geekbench both plugged in and not and got about the same score (and started getting a much higher score once I replaced the battery).

They probably wouldn't - you wouldn't want the phone to die if someone unplugged the charger during high usage.

When the phone is connected to a charger, is it drawing power from the wall? Or is it still drawing power from the battery?

Not an expert, but I'm pretty sure it is drawing power from the wall. My understanding is it is not great for the battery to act as a pass-through for power.

Many cheaper devices warn you not to use the device while charging, because they don't invest in the circuitry to bypass the battery while plugged in.

My guess would be both - it draws wall power up to a point and once it hits the limit of the charger (usually 5W for the small iPhone cubes) the rest comes out of the battery. So light use might still trickle the battery, but turning on the camera probably drains the battery slightly.

Vital question.