For Fable you are just under 3/4 of the way through.
The dig icon will not show up when you are looking for Lady Grey's necklace (it is the only time it does not). Do you know where it actually is? Been to spy on the traders in the memorial garden?
If there is something to be dug up or fished, the icon will appear in the bottom of your d-pad automatically.
Righty...assigning shortcuts: whilst in-game press up on your d-pad, this will bring up a list of your food, potions and 'other' items.
Use the d-pad to find what you want assign (spade is under other
). Then just assign it to what ever one of the 4 shortcuts on the pad that you want. You can do this with anything from the above menus (sorry no weapon shortcuts). To access the shortcuts hold in R1, then press the d-pad.
Fable TLC is longer
I would say maybe 2 hours of main game play. You will unlock new areas, get new weapons and a coupel of outfits. Although the new stuff will not be around until you are in the new area.

TADA!!!