Woot-woot! Kay-Kay! (and you too, IP_SEC!!!!) It's funny because most little kids get that riddle right away and adults tend to rack their brains with it! Nothing is supposed to be the correct answer ... I have a lot of conflict about my belief in God right now, so ... so much for the riddle!
And FMZ ... I am pretty positive about the answer to the first riddle and you are on the right track, but still not there. Ironically, the answer is FIVE letters, and it does have to do with what you put in your coded answer.