2) Keep posts relevant to fairytales/folktales/mythology. Home design, architecture, decor, fashion, crafts, diy projects, inspiration pics, product links, costumes, art, literature are all appropriate topics.
3) If you're posting just a few pics (one or two), no LJ cut is needed. Just keep them at a reasonable size. If you're posting more than a few, just put a preview pic on top (again, reasonably sized) and throw the rest under a cut.