is there any german phrase for "friendzone"?
Herzkaputt haha (is that a real word?)
is this a happy end or tragedy?
Yes. As in, it could be either, it's impossible to say without further context.
"she sees he loves her" and "she sees he loves them" should be accepted
why not "dass ihn sie liebt"?
ihn is accusative. "Sie sieht, dass ihn sie liebt" would mean "She sees that she loves him."