During this time it's possible that the client is terminated and/or the connection is dropped.The connection will only be dropped if either the client or the server is terminated or an intermediate firewall times it out.
Is there a way for the JVM on the client to detect that the port has closed?No, because the port won't have closed. The connection may have been dropped; that's not the same thing. RMI does use TCP keep-alive, which can detect a broken connection but only after two hours.
1) I can configure the RMI keep-alive for a much lower value (a couple of minutes would be acceptable)There isn't an RMI keep-alive. There is a TCP keep-alive. You can't configure it from Java.
2) Is there some other mechanism I could use to detect the client is no longer available?No.