1. AFAIK monsters don't regenerate their hit points when you're fighting them. I suppose some of them might, though. I'd check a bestiary to find out for sure.2. Some of the skills continue to improve. All of the might skills will improve indefinitely as will most of the magic skills. Learning definitely continues to improve. Certain skills cap at GM, though - Merchant, Disarm, ...
Merchant's a bit funny. If you get to GM Merchant, everything costs its base price. But if you only get up to M Merchant but raise the skill level above 10, it continues to improve.
If I remember right, M Merchant 35 = GM Merchant 10. So, any skill points in Merchant above 35 will effectively reduce the cost of certain things. Items never cost less than their base price, but a ridiculously high Merchant skill at M level will leave trainers paying you to train you. A nice way to make money. :-)
