You need to reduce the size of the drainage outlet down to quarter to half an inch - I don't know what you could use to achieve this though.

Use perforated zink gauze that motor shops sell for fiberglass repairs on car bodies. This will give lots of small drainage holes with a lot of metal between them.
Another way would be to screw up some wire chicken mesh and push it into the hole.

Water -by moisture of compost not by rule. More if the weather's dry than if its wet, more if the container is small than if its large. Also depends what you are growing - some things need more water than others. If you are really unsure you can buy a metre with probes that you push into the soil and read off on the scale. I am constantly suirprised by the readings on mine - some things that are really dry on the surface are quite moist underneath. Overwatering is just as bad as underwatering and sometimes worse.