In Madrid, the main language is Castilian Spanish which is different from Latin American Spanish. This took me by surprise when I first arrived in Spain, because I came under the assumption that they people here would speak like me, just with a different accent! That was not the case, though. Many words are different in Castilian Spanish. For example, I say jugo when referring to juice, while they say zumo. Because Madrid is a big city, other languages are occasionally spoken here, too, such as English and Catalan, but most people speak Castilian Spanish.
Madrid uses euros, which are colorful and smaller than U.S. dollars!
I do not recall, simply because I'm an avid water bottle user. I found out very quickly that Madrid has extremely clean water, so I never had the need to buy any. I would just use the tap water. According to my roomate, who is a Spanish local, the tap water comes from a nearby spring, and that was enough to stop me from buying any bottled water.