1.keep close to him and combo his ass before you bleed to death.

2.you can change to someone else by returning to map and re-entering the battle

3.Who is this old lady you talking about?

Im new to this game, and i cant even beat one of those first training missions.

B+Y+X+L combo feels like impossible because after hitting B first time it feels like other buttons do not work. If i want to make a combo i need to hit B atleast 2 times, and i mostly get 3 hit combos only. :(

Practice! It's not like if all of us here just picked up the controller and did a 10 hit combo to pass a mission.

Ok, here's the deal. When you do the fighting side quests, your character choice is determined by how many you have completed training with so far. Usually, the characters you have trained with most recently are the ones you have better odds of getting. Other that that, your character is random.

1. I use Baraka. His 5 hit blade combo is the most effective combo in the game. If you don't get Baraka, end the match, or quit, then challenge Tsung again, keep doing this until you get Baraka. PS, this can only be done once you have trained with him, in Outworld.
2. I just explained that^^
3. Here is a textbook version of what you need to do in the Lin Kuei/Shiri Ryu mission:
Go to coordinates (inside LK camp): G-8 Enter the Lin Kuei base and speak to one of the red-robed individuals here. He is standing near a small group of bare trees; he also has a sword on his back. He says you have to prove your loyalty to the clan. He tells you that you must defeat a Shirai-Ryu member in battle and return to him with proof. Head to the group of Raiden worshippers in E-8. The Shirai-Ryu message you found is a clue to this location. Search for the woman who seems to be spying on the group. She will be standing in front of one of the huts here. Speak to her to learn of her Deception. You will now fight Scorpion. Defeat Scorpion You will also receive the 'Shirai-Ryu Mask' item after the woman runs off.
That's it. Hope it helps.