Regarding item 2: it's no surprise that this doesn't really work at the minute level. VIX and VXV both track volatility at the daily level over the last 30/90 days. This implies movements that aren't really meaningful at the minute level, i.e. noise. To paraphrase you, the signal you're looking for is "periods of fear," which is based on investor sentiment. But does the bearish/bullishness of investors really change significantly at the minute level? I don't think it does. I think that VXV and VIX movements at the minute level are basically noise -- as such, you get bad results.
On the other hand, bearish/bullishness of investors does change significantly at the daily level.