I know an Ace is given when the serve is unreturnable, however what if the returning player hits the serve out of court or into the net. Is this still considered an Ace?
No, you got the right idea of saying an ace is a serve that the returner cannot touch. Even if the returner touches the ball a little bit, it still isn't an ace
an ace is where the other guy can't even touch the ball with his racket.
if he's able to return the ball, whether into the net or out of the court, it's NOT an ace, but simple a very good serve.