Is Java still supported?Yes.
Is there updated eclipse plugin to download?Use the one from the ArcGIS installation directory.
Eclipse Visual Editor was only needed to do visual drag/drop of ArcEngine components, and you are correct in that the Eclipse VI project is retired. However, you can still download that project and use it with Eclipse 3.6.(something - I forget).
Use the one from the ArcGIS installation directory.
Although not supported by ESRI, Eclipse Java Indigo 3.7.1 will work fine with the plugin from the ArcGIS installation directory, you just don't get the visual drag/dop stuff for ArcEngine map controls, toc controls, etc.
All of the configuration is clearly in the ArcObjects Project code, if you wanted to change it.