Q1: please take a look at the OpenSprnkler user manual. It explains and has a diagram showing how sensors should be connected:
https://openthings.freshdesk.com/support/solutions/articles/5000716364-opensprinkler-user-manuals
Q2: I am not sure how to answer this question since I don’t know how the sensor works internally. I believe as you said, when rain reaches a certain level, its contact will break and OpenSprinkler can detect the change in the sensor status.
Rain delay and using rain sensor are two different things. Rain delay is a manually triggered event, you as user can trigger a rain delay. Rain sensor is automatic: as long as the rain sensor is activated, OpenSprinkler will respond to the rain sensor status until its status changes again.