+Joshua Rutterbush"... it makes sense to give them all a weapon that greatly benefits spear-wielders."
It is explicitly stated that only four rings were created, one being given to each of the Four Knights of Gwyn."Ornstein almost certainly wasn't Gwynevere's illusion, because those break after taking damage. Also, illusions tend not to make people bleed."
When the illusion is lifted from Anor Londo, normal enemies disappear. Said enemies take more than a single blow to defeat and are capable of making you bleed.
According to the lore of Dark Souls, many "gods" left Anor Londo, including Gwynevere. It is possible that Ornstein was among them.
His dulled armor may be, as you suggested, caused by aging/neglect.
His dulled combat abilities may also be caused by aging, but because he uses dark magic, I like to speculate that he was resurrected[?] and corrupted by the Abyss.
MAJOR SPOILERS: Nashandra is the rebirth of Manus, after all.