I'll answer your questions

How can I destroy keys that Schazer has collected? Can I just take some of them?

I'm doing that anyway. Keys one and four are mine now. Nyeh.

You cannot destroy a key without a proper Dark Object. You CAN just take some of them.

And you have.

You have stolen key 1 and key 4 from Schazer.

You now own the Key of Goat, and the Key of Rumham

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does being on fire count as a non-physical wound, I'm pretty sure that's classed as elemental damage

Being on fire will definitely cause physical injuries, but I can appreciate the appeal to the elements