If I remove someone from my ITunes account, will they lose all their music/apps

Yes. Apps and DRM protected media are permanently tied to the account used to purchase them. They can not be transferred.

Look into various sharing options:

iTunes: How to share music and video - http://support.apple.com/kb/HT2688 - about Music Sharing and Home Sharing

Home Sharing Support page - http://www.apple.com/support/homesharing/

iTunes: Setting up Home Sharing on your computer - http://support.apple.com/kb/HT4620

Understanding Home Sharing - http://support.apple.com/kb/HT3819

Family Sharing - http://support.apple.com/kb/HT201060 - "Family Sharing makes it easy for up to six people in your family to share each other’s iTunes, iBooks, and App Store purchases without sharing accounts. Pay for family purchases with the same credit card and approve kids’ spending right from a parent’s device. And share photos, a family calendar, and more to help keep everyone connected."

Sharing purchased content with Family Sharing - http://support.apple.com/en-us/HT201085 - "With Family Sharing, family members get immediate access to each others’ music, movies, TV shows, books, and apps, and can download them to their own devices any time they like.*" "* Not all content and content types are available in all countries. All family members must use the same iTunes Store country or region. Music, movies, TV shows, and books can be downloaded on up to 10 devices per account, five of which can be computers. Apps can be downloaded to any devices the family member owns or controls.

http://www.iclarified.com/41419/whats-new-in-ios-8-family-sharing -

If you don't see your family's shared content - http://support.apple.com/kb/TS5449 Also: http://apple.stackexchange.com/a/146077 - quit iTunes Store and App Store apps and start again.