I did psych last year, so I'm a bit rusty. Here is my take on your questions:
1. IIRC, the individual goes through the primary appraisal stage, then if they decide the event is stressful, they engage in the second part of primary appraisal (appraising the situation as harm/loss, threat or challenge), then secondary appraisal. If their coping resources to deal with the stressor are adequate, this is where the individual may experience eustress.
2. If the situation is appraised as challenging, this can lead to eustress or distress, as I alluded to above. Often, the individual can appraise the situation as more than one type (e.g. threat and challenge) so they may be experiencing eustress and distress.
3. When appraising a situation as a harm / loss, you're assessing how much damage has been done whereas when appraising a situation as a threat, you're assessing what future harm / loss there could be. For instance, if your car has broken down:
- appraisal involving harm / loss: my car has broken down in the middle of the highway
- appraisal involving threat: I might not be able to drive to work this evening
Hope this helps