Levels of injury should be what you describe as rule. Almost all of the answers so far describe perfectly fine ways to do this.
Regarding the question of exposing exact monster stats (HP, etc.) the answer should generally be an emphatic "NO!" to showing or telling HP, AC, or stats for one very specific reason -- you completely lose the ability to fudge combat numbers as a DM.
This ability is of the utmost importance to having a fun session.
Running a game, you will inevitably run into a situation where something has gone wrong and combat is too easy or too difficult. Usually, this is because:
- Players misinterpreted or overlooked something essential to the encounter.
- Someone makes a series of REALLY bad rolls.
- There is a serious "Oops!" regarding the difficulty of the monsters or villain.
- There is a serious "Oops!" regarding the combat abilities of one or more player
characters or friendly NPCs.
You will need to correct this by fudging. You can, of course, introduce a third party, power or situation to assist the players or NPCs, but if you do that more than a few times, you players will notice and it will decrease their enjoyment of the game.
Exposing exact HP or monster stats at any time makes this preferable kind of number fudging essentially a non-option. You are stuck "playing by the rules" all the time. This creates a significant lack of control over your own game.
DM (sighing) : "Nope, Phil, your dead. I rolled a 20, you can see the dragon's combat bonus, and you only had 10 HP left. Sorry."
If you choose to hide stats so you can fudge numbers, however, you have a number of benefits, including:
Relieving unintended tedious combat via quick monster kills (Lowering HP or mild AC fudging.)
Protecting weak or unlucky characters/ non-party NPCs/needed villains (Lower monster combat bonus/HP fudging/mild AC adjustment)
DM : "It looks like a small, magic ring...very easily missed..."
Increasing action -- It's much less boring AND far more rewarding to describe a character's last ditch effort to run up the back of a dragon to stab it in the eye, instantly killing it than it is to listen to a player bemoan the fact his or her character can only do 1d8 + 5 damage, and the dragons HP is still a 100 points to the good. (No fudging HP or AC! We all know the stats!)
Increasing tension -- Don't keep players hovering on the brink of death for every encounter but do push them a little once in a while. If your players have been smacking up on a monster, and the monster has been giving it right back to them, let them sweat a little bit. Adjust the monsters HP slightly so they have a small run of bad luck (a quick scare - can we kill it after all?) before letting them settle things with a mighty final blow.
It doesn't mess with XP -- Adjusting monster quantities on the fly can lead to experience imbalance (for or against players) as well as combat issues (merciless slog or legendary calkwalk). Adjusting HP, AC, and other monster stats during combat gives you the option to run your encounter with the exact creatures and XP amounts you intend WITHOUT radically altering difficulty or having to recalculate or fudge XP -- MUCH more important topics to players than subtly juggling a few monster stats.
It creates interest -- As a DM, don't be opaque. If players encounter a werewolf and have no silver, a simple acknowledgement they need silver weapons ("Yeah, Phil, you need a silver weapon") can save a lot of frustration. But throw them a curve ball by making a werewolf with higher than normal HP or have an almost full immunity to anything other than a particular kind of silver. If you expose the increased HP or better saves,however, you destroy some of the aura the players are likely feeling fighting a "new" old creature.
The only caveat to this is that frequent, almost non-stop fudging is usually a sign of poor encounter construction (you're new to running a game, you're terrible at math e.g. figuring out how much damage characters and NPC monsters can do to each other, or you're deliberately building encounters heavy -- 4e has this issue built in if you follow strict WotC printed rules).
Remember that fudging is not a substitute for well balanced game numbers and abilities! (player stats, monster stats and ALL in-game AC/DCs). Monsters with abilities to alter AC, regenerate HP, etc. also deserve special consideration since they do a sort of in-game fudging of initial stats already.
With all that said, you may get a majority of players that want open HP or monster stats... in which case you should give it to them. Good DMs listen to players.
But you should be absolutely clear (in your own mind, anyway) that this is a bad habit that brings down game play in general unless you or your players genuinely care more about rolling than most other things. Genuinely stat-focused players care mostly about their ability to be very successful, and monsters can have 10 HP or a 1000 HP... so long as stat-focused players can bring down a 1001 HP meteor to crush their enemies, they won't care. Open monster stats, especially HP and AC, only make players worry more about stats and less about the world they are creating with you as DM.
You should be aware that often the people who root for open stats aren't familiar with the advantages of hidden stats (such as the DM favoring them when they make a bad roll), are people who don't trust the DM generally (players vs. DM style games, not the DMs well-though out world) or those who are rule lawyers who simply want an tweak/exploit advantage over the DM ("No, my character DOESN'T get hit because I have a +1 racial bonus for being a giant dick!"). This leaves you with a choice - play with hardcore math nerds (no judgements, many of these players are really nice people and like this play style) or show your players,though hermit-like with monster stats, you can be fair, honest, trusted to empower their characters, make the game fun and make combat descriptions as fun as stat juggling in the game. More importantly, remember open stats hinder everyone, not just the DM. So if a player expresses a wish to do open stats, you may consider exploring why a player feels this way. There are DM screens for a reasons.
Unfortunately, player perceptions of you as a DM, your game, or their characters will suffer more in all cases if you can't fudge numbers OR if players are certain you are fudging (e.g. they can verify it with open HP, AC, bonuses or stats.) Worst case scenarios will yield copious complaints by the players, with vows against their character sheets, swearing at monsters stats, condemning random dice rolls, questions about your "skills" as a DM as well as final, solemn resolution NEVER to play again...
On the other hand, with hidden stats (and some DM rolls), minimal judicious fudging, and well planned encounters, you generally get happy players who want to actually play in another game you are hosting, assuming you aren't crafting monster stats specifically to hammer them.
The bottom line is you can empower players MORE (without them knowing) if you hide stats. It also allows you to craft better stories or encounters on the fly. Some players may hem and haw, but if you are a good DM and can convince them to take a hidden stat approach that makes them feel a bit little more powerful than your creatures, in the end, you will find few players complain.
So you decide... which is better?
As for your second question, descriptiveness is a great tack here. But rolls and fudging work too.
DM : "You pierce the creatures skin, but watch in horror as its wounds close almost instantaneously... like magic." (Your first hint.)
After a few turns, and a goodly number of hints later, if the players still haven't gotten the idea to use magical weapons, either tell them fairly directly ("None of you are certain, but you suspect that perhaps, maybe, an enchanted weapon might harm the creature.") or allow Wisdom checks of some kind (Intelligence can work as well).
Note this assumes no one is actively using magical weapons. Make sure to give them any enchanted weapons you want them to have. If they are using the proper magical weapons, you should make every attempt to exaggerate and highlight a successful hit. A great part about hidden monster stats here is that, again, if you wish, you can fudge a successful hit with a magic weapon to demonstrate it is the only one that does damage by ignoring AC for a minute. This is literally impossible to do if the players know the monsters AC upfront. Smart players will figure its general AC out through a few successful rolls, but this is not the same thing as knowing definitively.