1. Is PI using the system variables called TEMP or TMP ?
Not in this case. StarAlignment loads disk images completely in memory. Target files are loaded one at a time. The star detection phase creates several single-channel temporary working images of the same dimensions as the target image. Once stars have been detected, the target image and all working data are deallocated.
If your SA task consumes a significant amount of RAM, the operating system may start to use virtual memory allocated on disk as a side effect. However, with 16 GiB of RAM this doesn't seem reasonable in your case.
2. What is the difference between View vs File process wise?
There is no functional difference, other than the fact that a file item requires loading a new image from a disk file, while a view item uses the image that is already stored in memory.
3. Is there any known limitations publicly posted for large frame images I could be directed to?
There are no theoretical limits. The only practical limits are the amount of available RAM and disk swap space, in case your system decides to use virtual memory.
During the loading of these files the computer just shuts down!
Your machine should *never* shut down spontaneously. If this happens, there is a hardware problem with very high probability IMO. This could be a failing memory chip or a thermal problem, among other things.