I am.
I am not an American law student. I am also halfway through real property and have not covered leases yet. I was trying to think of it in a contractual manner. However, I’ll have a potentially embarrassing crack at it.
The agreement is between herself (L) and her Tenant (T). Therefore the subleasor (S) does not have privity in that agreement.
L and S have no agreement with each other. T and S have an agreement with each other.
We are not privy to the agreement between L and T, and thus the assumption will be made that there is no positive prohibition of subletting, or that the agreement is silent on subletting, and that L had notice of S at some past date, which seems to be the case on the facts (five years ago you damaged the bathroom).
Further, the matter is complicated as 1.) as the agreements are oral agreements, and therefore may not be enforceable in law (although equity may assist, as in estoppel) and 2.) it appears to be an ‘at will’ tenancy, and not a term.
L & T have privity of contract (Beswick v Beswick) and privity of estate. L, in equity, as she had notice, also has privity of estate between T and S, although not privity of contract. I say this knowing that there is a common law requirement for T not to derogate from grant - and no permission was granted to sublease. Warren v Keen [1954] 1 QB 15. However, since she had notice and did nothing for many years, equity would say that now she has obligations to S, as equity aids the viligant, and not those who slumber on their rights.
The law cited in this thread says that since she did suffer the tenancy (presuming notice of it), she may evict on 60 days notice for any of the reasons given. One of those reasons was ‘non-payment of rent’. Thus, if she can prove non-payment of rent, none of this actually matters. The OP claims his rent is paid. If he can prove this, he should win.
Thus, to answer your questions:
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In equity, the landlord does not have such a right, but in law it appears in this case she does - and equity follows the law. In this case, however, there are not enough facts to make a positive conclusions, and;
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The privity that exists between the landlord and subtenant in this instance is the privity of estate. There is no privity of contract as there is no contract between them.
This is the best answer I can give you away from my notes in 20 minutes at my lunch hour. 
I made no guess as to the matter of discrimination, and continue not to do so, but it would be a matter the OP might raise to a tribunal of fact if in fact he has paid his rent and if the matter goes that far.
