For mystery: Ruby only appear in the Gold Saucer desert (His liitle red head pops out of the sand) after you progress through the story enoof. Can't remeber when exactly.
And no your Tiny Bronco can't fly. I should know!
KotR is abviously way better damage wise, but it takezs way way way to long to use. So does Bah. Zero. However, I think Zero looks cooler. The whole Space Dragon idea is cool.