I was wondering the same thing.  I actually saved before doing the quest, chose the first option (something about Cesara, I don't remember the wording), and got 0 XP and 0 fame.  I then quit and reloaded the save, and this time chose the 2nd option, like you did, and got the same results as you.  So maybe all 3 options result in nothing immediate, but something later on?  Or maybe it's broken.  I don't know.

Yes, there are mysteries to explore.  There is no bug, those are working as designed.

Don't spoil it for me, but I'm guessing that the frog altar gives you a Frogboy amulet that you can use to summon Draginol and his army of Drengins.

So far, the only difference that I've noticed when picking different options at the Wishing Well is that the Ancient Scrying Pool that appears is in different locations and shows you a different vision ... and some of those visions are worse than others. I don't really know what else it affects in the rest of the game, since I haven't gone very far into the scenario.