1. As Zammm said, they don't really care which medium you use as long as the art is what they are looking for. It can be digital painting, watercolor, acrylic paint, mixed medium. Basically anything that you confortable with.
2. It's mostly done digitally these days. You can send your work at this email adress email@example.com
(that is if they didn't change it).
3. Finally all artwork would be delivered digitally through email. If you work digitally, you would send them a flattened file. And if you're using traditional medium, you need to scan it, most likely you will need to correct the scanned image (balance the colors, remove dust particle, etc.) and then send them the flattened file.
Keep in mind that my answers comes from my little experience in freelance illustration and from articles about some illustrators that work for Magic. So it may not be completely accurate.
Anyway, you can check this blog muddycolors.blogspot.ca/
. It's not Magic related, (although a few MTG artists post some articles once in a while) but it has a lot of info about the illustration industry and anything illustration related.
Hope this helps!