Throughout modern history, even terrorists had moral boundaries. Terrorists historically attempted to avoid murdering innocent men, women and children. Arafat, however, made the murder and maiming of completely innocent men, women and children the very purpose of terror and one of his life's major legacies.
Yasser Arafat single-handedly made nihilistic acts of cruelty routine, even respectable. Many people were horrified at the Palestinian slaughter of the Israeli athletes at the 1972 Munich Olympics. But humanity gradually became inured to Arafat-style slaughter. Palestinian and Muslim disciples targeted schoolchildren for death in the Israeli city of Ma'alot and later in the Russian city of Beslan; tortured and murdered American diplomats in Sudan; and Arafat created a society whose only exports were new forms of religious hatred and new expressions of barbarity. Thanks to him, the Palestinian name is identified among people of goodwill with barbarity just as the German name came to be associated with barbarity as a result of Hitler.
If, then, there is a just God, and Arafat was the particularly venal human being described here, the answer to the third question is obvious.
Just as any decent human being would want good people to be rewarded in whatever existence there is after this life, they would want the cruelest of people to be punished.
So, of course, I hope Yasser Arafat is in hell. It means that a just God rules the universe. If you think that is hard-hearted, consider the alternative, that one of the most corrupt and cruel human beings of the past half-century is resting in peace. Whoever isn't bothered by that is the one with the hard heart.