Answer to Question 1
Candy thermometer is a more reliable index to doneness as long as the thermometer is calibrated properly, because the cold water test must be performed rapidly since the mixture moves from one stage to the next fairly rapidly.
Answer to Question 2
Subtract three degrees from the temperature that your recipe requires. Fudge should be normally cooked to a soft-ball stage of 234F-240F. Since the thermometer is three degrees off, the fudge should be cooked to 231F-237F.