Make it very clear what you can bring to the company you are applying to. In the current economy employers are not interested in doing favours for designers, they need people who can help their company grow, develop and change. This is most easily communicated through the simplest of CVs and a well-crafted portfolio evidencing your passions, skills and desires.
It's obviously very important to show commercial work if you have work experience. Juniors and graduates will have little or no commercial work in their portfolio and this is only to be expected. The portfolio needs to show your ability and this can be shown off better sometimes through self-initiated work too.
Yes and no. I am particularly interested in people who really do commit to their spare time activities. There are generic stock answers such as reading, cooking, going to the gym etc—generally we all do these to a lesser or greater extent. I'm interested in activities that keep the mind and body very active and creative. I once had a client who dismissed an applicant because they thought their hobbies were not a good cultural fit for their studio. Ironically she was a perfect fit, but unfortunately the client read too much into her hobbies.
Mainly applying for inappropriate jobs that don't fit their experience, or applying en masse and not tailoring an application.
Know and talk about your work authoritatively, and with passion and conviction.