In your example contained in the rules, it refers to Ludovico Il Moro.
He can raid any of the 3 towns.
1) If I pay 150 Floreni, can he raid each of the 3 towns once, or is he restricted to raiding just 1 town three times per turn?
2) could I spend 200 Floreni and make 4 raids?
The rules state (7): "Starting with the next action for the rest of the game, the player can, as an action, activate a Captain by paying him a minimum of 50 Fiorini up to cost of the card itself [ie. max 200]. By doing this the Captain will go raid a hostile town."
Since the Captain only appears in the third round, you can only use it max 3 times (once in third, fourth and fifth round) But if you can afford it, you can raid it 4 times (= 200 Fiorini)