As a university student (not attending the university mentioned however), I can chime in here. If we chose to come on-campus, we were given an addendum to our housing agreement to sign before we moved in. Simply put, no addendum signed = no housing (since they reserve the right to terminate one's housing for any reason). I imagine it's a similar situation for many universities nationwide.

Regarding your second point:

> Presumably “suspension”, while framed as a punitive measure against students, is legally just the college withdrawing from the contract under previously agreed terms?

The article addresses this: private universities have a lot more leeway on how they conduct business.