1. Toyota recommends holding fob next to start button, and the residual fob battery power will allow normal engine start.
2. No experience but I doubt it would be waterproof, or even water resistant.
3. The fob has a small metal key, which slides out of its slot in the fob, to provide traditional key access to the vehicle.
My Cruiser's a month short of three years old, and travelled 100,000 km. At one point earlier this year I thought the range of the fob was suspect so changed the batteries in both fobs. A painless solution and at no stage have I been locked out of my vehicle or been unable to start it. As it happens, the reduced range turned out to be interference or shielding, caused when the fob and my iPhone were in the same pocket.
Before I took delivery if the Cruiser, I thought the keyless entry & starting was just a gimmick. But I've found it's a wonderful innovation. Walk to the car with hands full of shopping and no longer have to put the shopping down and fumble for a key, or a fob to press the unlock button. Simply grab the door handle and the vehicle unlocks. Press the brake pedal, push the start button and you're off. All of this with the fob sitting comfortably I your pocket.