1) When Auron equips the Masamune, he gets a power boost when his HP is low. Try that and see if it helps.

2) There's a combination of skill and luck involved in this mini-game. Skill being your ability to catch balloons while dodging birds, but luck being where and when they are placed. Just practice, you'll get the hang of it, and the birds and balloons will fall in the right place eventually. Though it's always good to start off getting the first four or five balloons before you go to the open plain.

3) Eh....25ish. There's a trick you can use if you have the gil and the items.