Fishing was "bugged" in it's first release
Basically, anything was fishable by anyone, which was not how it was intended to be.
As it stands, you cannot fish level 500 items, but theoretically you could fish a 499 one if it existed.
It supposedly goes up to level 499.
For other items that could be fished, well, there are limitations.
For a lot, you could look in
items.list (the one from the editor, also posted a link from forum,
NOT the easy one items.txt), to find a line like this
541 474 BOOTS Greater Mage Boots MOVE_SPEED:1 PRICE:20000000 DEXTERITY:20 MANA:20 LEVEL:250 FOR_RANGED:1 NON_FISHABLE:1 Walking speed +1
Which is not fishable. Just like quest items are not fishable.
65 65 QUEST Book
But trophies are fishable (they're kinda like quest items, but they're different in the list).
63 63 TROPHY Wolf Fang
64 64 TROPHY Skull
But don't believe all the rumours you hear at start map. Players do not fish pets, unless they're keeping fish as a pet.
601 538 TROPHY Pet NON_FISHABLE:1 CAN_USE:4 Get the strongest follower available for your character. You can't have more than 2 pets.
Note the "NON_FISHABLE" tag.
As for the level, it is indeed based on your account's xp level.
You can fish items up to 20% higher than your level; i.e. if you're level 100, you could fish level 120 items, but not 125.
For the trade skill, it only increases your speed in the action, and each level gain you get, the bonus is less than the last.
Those are the pictures LostKnight posted, as found in this post
viewtopic.php?f=25&t=13964
(And LK, they don't show speed of crafting as that depends entirely on how fast you tap the screen).
Tools are also described in that post, albeit briefly, because they are simple.
In case you’re using a Great Tool, read the following tables adding 1 to your real skill level, while a Mithril Tool adds 2.
So a mithril tool makes it seem like your trade skill is two levels higher than it actually is. So it only affects speed.