Islandwalk cares about lands with the land type Island, not necessarily lands named Island.

The next time Merfolk Spy deals combat damage to the same player, the card that’s revealed at random may be the same card or may be a different card.

After the second ability resolves, the revealed card stops being revealed in its owner’s hand.

The second ability triggers just once each time Merfolk Spy deals combat damage to a player, regardless of how much damage it deals.