The man called Prince Richard or as he is later referred to as "the boy" is a different actor than Patrick Gibson who plays him in all subsequent episodes.
While it's true Elizabeth Woodville retired from court to the Abbey, the reasons are disputed. Historians generally agree she did this of her own free will, while some suggest she was imprisoned. One thing that is true and undisputed is that she was given all the honors and respect due to her as Dowager Queen by Henry VII including after she left court. Likewise, Henry VII lavished on her and she didn't live like a pauper. She was present at her grandchildren Margaret and Henry's births and was visited regularly by her daughter Cecily and by her daughter, the Queen.