ArcGIS WGS84 Web Mercator Vs. WGS84 UTM zone 15N: Very different distance dimensions

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I am working in ArgGIS 10.1 with a field (raster layer in tif format) in which I have placed two points (.shp layer).

I have two versions of both layers, resulting four layers: one tif+shp set in CRS WGS84 Web Mercator and the other tif+shp set in CRS WGS84 UTM zone 15N.

If I establish the CRS of the Data Frame to WGS84 Web Mercator, the distance between the two points is 138 meters, but if I establish the CRS of the Data Frame to WGS84 UTM zone 15N the distance is 99 meters, which is a huge difference. However, the point layers are displayed absolutely one above the other, I mean: the two points in one CRS haven’t any displacement in relation to the other two points; and the same for the rasters.

1. Why don’t I see both pairs of points misplaced? Is that “on the fly”projection by ArcGIS? If it’s so, does it mean that ArcGIS projects“on the fly” even between data with CRSs of different geographiccoordinate system? (as far as I am concerned, ArcGIS only projects“on the fly” between data with CRSs with the same geographiccoordinate system but different projection).
   
   NOTE: Both projected CRSs (WGS84 Web Mercator & WGS84 UTM zone 15N)correspond to these two different geographic coordinate systems: inArcGIS, Geographic Coordinate System > Spheroid-based > WGS 1984Major Auxiliary Sphere & Geographic Coordinate System > World > WGS1984, respectively.
   
2. Another major doubt is which of the two CRSs is then better forworking in the south of Minnesota State (US).
   

Thank you for any help or idea given.



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