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1. Discarding 7 cards for 2-3 player games before dealing players hands. Does that happen once only at the start of the game, or does it happen each time the deck is re-shuffled and the new cards added? We played the latter, and it seemed like it chewed through the cards fast - which is maybe a good thing to get the new developments out.
You always discard the 7 cards. Even when you re-shuffle the deck.
2. when the deck is re-shuffled do the existing hands get shuffled in as well, or do they continue circulating as before, just getting the 1 card added from the new deck? We played the latter.
No. You only re-shuffle the discard pile.
3. I think we were supposed to discard 6 tiles before starting play (we forgot!). Is that only for 2-3 player games?
Yes, only with 2 - 3 player.
4. When you construct, and get a card added to your tableau, does its bonus apply immediately (eg if it has a construct icon) or from your next play?
You added the card at the end of your turn, so the bonus works first in your next turn.