How is Absolute altitude determined?

Is it based on GPS altitude or baro altitude using standard pressure setting 1013 hPa. Is there a way to set QNH in-flight?

ardupilot calibrates baros for the local pressure on startup. post-startup adjustments are possible within certain limitations, in MissionPlanner press CTRL+F and look for the QNH button.

QNH is available in the advanced failsafe system too.

EDIT: just saw this PR: