It's pretty distinct. In between vowels, Koreans can distinguish the allophone. However, I've been to Korean restaurants where “lobster” was transliterated as “롭스터” (“Robster” on the English side of the menu). I got a good laugh out of that.
That's how -ㄹ verbs work. In some forms, the ⟨ㄹ⟩ behaves like a silent vowel. It gets deleted completely. But it’s a regular pattern, so once you are familiar with it, you can apply it to other verbs of the same kind.
It should actually mean the subject wording- like "am/is/are" in english. As far as i know, 이 means "this" when it is written before and separately from the subject like "이 빵이..." which would be "this bread is... "