Why is the connotation of suspended used to describe suspended chords? Is it due to the sound of the chord or does suspend refer to the omission of the 3rd? Information of when the term was first applied to music and who first used it would be appreciated.
The term actually comes from the situation where a note from one chord is "suspended" (i.e., "held across") into the next chord but is not a part of that chord. The quintessential example would be a dominant seventh chord moving to a tonic chord, but the chordal seventh is held over into the tonic chord before resolving, as shown below.
As jazz and popular music developed, they adapted the use of the term "suspension" to reflect chords in which the third, for example, was replaced with a non-chord tone, but which may not be suspensions in the sense shown above. The chords became used as independent entities, not requiring the preparation or resolution.
'Sus' is generally related to the lack of 3rd, being substituted by 2nd or 4th. In reality sus should be used when the 4th is used, and 'ret' (retarded) used for 2nd, but it's rarely applied.
iim7♭5 is often a substitute, which actually sounds good.
There's always the possibility it's called sus as it's neither major nor minor. The 3rd is in the wings, waiting.