1) There's a certain chance an item is dropped, each with different frequencies. I don't have exact ratios, but here is a descending list of item drops from common to rare.

Rupee
Heart
5 Rupees
Arrow*
Bomb*
Clock
Fairy
10 Rupees

*For arrows, a certain quest rule must be checked. For bombs, there is a way to make it drop certain numbers of ammunition.

Please note this list isn't 100% accurate. I hope it helps some.