How do you get the level 3 sword, and the level 2 shield, the level 2..

You can't get the lvl 3 sword (unless you have the secret from oracle of seasons!) only lvl 2, and this is how to get it:
1)get the poe clock from the ghost
2)trade it with the postman to get the stationary.
3)trade it with the hand in the toilet to get the stink bag
4)trade that with the tokay cook to get the meat
5)trade that with the guy in the mask shop to get the mask
6)trade the mask with the woman with the shy dog to get the dumbell
7)trade that with the guy in the volcano town (past) and get the moustache
8)trade that with the guy who tries to be funny to get the funny joke( it's seriously funny!!!)
9) use the funny joke with Daikinda (the person in the past in the dark house) to get the sad book
10)with the sad book bump into Maple(the witch) and she give you the magic oar
11) give that to Rafton. He gives you the sea Ukelalie.
12)then you give that to a Zorrra which is a far south as you can go from the Mermaid dungeon(see below). He give you the broken sword.
13) you then go to see the guy who fixes the Tuni Nut. And there you go!
The lvl 2 shield is in a cave to the very southwest part of tokay island in the regular world.
The hookshot lvl2 is in the 7th level (jabba jabba's belly)
The 6th level is in the northeast corner of the world (travel through Goron mountain)