Nah. I think there's better than even chances he'll appear again before the season finishes, after having gotten his rags working again. And even if not, he was a great character who improved the show during his time on it. Plus, Arrow isn't the only show he could return on. Its a big universe, he could guest star elsewhere.
Nah, not for me. As Rory, he wasn't used much besides to interact with Felicity and even then, that only really happened in the last episode or two. And as Ragman, he certainly wasn't utilized as much as the others. Probably because his powers are too broken for the kind of villains on the show.