Re: Odds question...
 

How about this...

You calculate pot odds based on the information available to you at the time you're making the decision. Since you usually only know the two cards in your hand and the three on the flop, that is all you can go on. The other 47 (be they still in the deck, or in your opponents' hands are all unknown and have to be treated the same. As unknown.

If you believe your opponent(s) has/have some of your outs then take them out of your calculation. If you have 8 outs for an open-ended straight draw, but there are two clubs on the board and you believe your opponent is holding two clubs, then remove those two cards that makes your straight and give him the flush. Therefore you have about a 12% chance of hitting your straight on each of the turn and the river.

Tell him to remember that "outs" are cards that improve your hand. They are not necessarily cards that give you the winner.

About his outs being folded...if he didn't see it being folded, he can't possibly know it's gone. Therefore it's just like the cards in the deck and cards being held by your opponents...unknown.

Re: Odds question...
 

The odds scale.

When you say, "Well I have 2 opponents, 1 of them has a diamond because they have 4 cards" that means you must also say, "Well I know 3 cards AREN'T diamonds" and your flush draw percent doesn't change one bit*

*However since you're good at math you also know that when you have 2 diamonds and there's two on the flop then a diamond won't be distributed in other players hands exactly 1 out of every 4 cards.