The point to Earth and Wood Tokens is you can change your choices once you know what your opponent chooses. Since both sides declare at once, and you flip them, it allows you to either not take a loss or to change a choice to a win.
You need to win two out of three scuffles. If you're already down one, cutting a second means it's a draw. If you're up one and confident you can win the second, it's a victory.
I'm not sure what you're looking for for the last question.