Dig Up the Sea of Spores!
2) The best place in the Sea of Spores to find the Spore Zombies is more along the left hand side but the trees are all over, down in the pit. The drop rate is so-so, around 50%. If you fill up 50 from one pouch you can go back to Gauen or continue to fill the other. I filled both to 50 the two times I ran this quest.
3) There are two possible rewards when you return to Gauen if you bring back both pouches filled. If you respond "all that trouble..." you will receive 20,950 adena, which interestingly enough is less than half of what the reward was in C3 (it use to be 44,000)
If you go the first option and just put down the pouches the reward is 35,000 exp and 2,500 sp.