Can a 49-way stick be interfaced with a PC? If so, how is this done.
I have this ridiculous picture in my head of filling up all but 7 connectors on an Ipac 56 with one joystick 
Nah, you'd only use 8 ipac connections + ground + VCC. You'd then need to edit mame's source code to use the raw inputs.
The linked thread tells pretty much everything else, except that "analog joystick" and "Hall Effect joystick" mean the same thing for the computer joystick inputs.