1) As long as you're aiming at, or locked on to, something you're pretty much sure to hit it. That goes for spells, bows and melee. Sometimes you'll miss, but that's either simply bad luck or that the enemy evades. The damage done, however, is dependent on many different stats on both sides.
2) Dragon and Character are different, except that the hit points and mana of the human form influences those of the dragon. So the higher level you are, the more mana and hit points you have in either form. If you're hurt in dragon form, you'll also be hurt in human form when you change back. Dragon form rapidly regenerates mana but doesn't regenerate hit points (though there is a spell for that). Human form slowly regenerates both, though this can be accelerated through various means.
3) You can find "charms" that give you, for example, +2 to intelligence. Once you use a charm, that's it - it is stuck and used forever. Items have a certain number of charm slots ranging from none to several. There are also "enchantment" slots on certain equipment. You can enchant and disenchant equipment as much as you like, assuming you have the right formula and required ingredients.
