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No, OP is the Omaha/8 player overplaying A2. I would assign some rationality to seat 1's play and assume he does not have an ace, based on his action on 5th street. He would be in terrible shape with Ax97A, even if not technically drawing dead.
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Would you care to define what range "x" is before making such rash statements? If you limit it to K-J then you're probably right. If it's an unpaired wheel card (the much more logical choice) then seat 1 is still in the
lead despite pairing up. If you think that having 42% equity in a 3-way pot is being in "terrible shape" then maybe you need to reevaluate your game.
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You are right. The other boards are so bad that seat 1 bets with AA here partly for value and partly to try to take the pot. It is pretty certain he has two wheel cards in the hole and likely low or live ones.