Yes usually necromancer are alive. In this case he was alive. During a battle he had got a deadly wound, and the only way he could survive, if he bonds his spirit to his dying body. In the process he lost the most of his power, but he managed to keep the ability to cast spells, and in time with a lot of work maybe he can be as powerfull as once he was. Of coarse he has enough power and experience to be a teacher.
The City of Magic don't have to be dark or goth because of this character. I've read the game, and I can picture the city, and it is good that way. Anyway this character usually would stay in the school, and almost never go out.
One more thing. This character wouldn't be evil. Dark yes, but not evil.