This is the gambler's fallacy: If you try for the same thing enough times, the chance will increase to get what you want.
It seems to work for me, eventually. Just by sheer luck, sometimes, the item you want will drop eventually. You can get it on the first try, and you will get it on the last try, but how many tries is up to RNG.

From what I understand, experience is given flat out, as long as the enemy dies somehow. This could come from direct damage from the party, side damage from an ally of the party, friendly fire from enemies, etc. It doesn't matter, though I prefer to kill enemies directly, as this is a zero-sum game (any damage I don't do to the enemies directly reduces my skill ups).
With skill ups, I don't understand it fully, but it seems that the spell level, power level cast at, base mana cost, and controlling attributes all factor into whether that skill increases. I believe that it has to complete 8 checks to increase. The formula works something like 100-skill, so at 0 skill, you are the most likely for an increase, at 99 skill, you are the least likely for an increase, and at 100 skill, increases are impossible, due to the 100-100 (0X) multiplier.
With grinding/farming an item, it's just the luck of the draw. You could get your desired item right away, or it could take near forever. On average, how long it takes depends on math. Just take the chance of an item even dropping in the first place, times the percent chance of that specific item appearing on the drop list.