Shooting Targets/dummies does not influence your archery skill. Shooting NPC's does! You need to ask this over in the hints section I feel!
Yes, it must be enemies or NPCs. I.e. you must be damaging something with your bow.
When I was a really low level I jumped on a hill and shot at mammoths until they died. Levelled up like four or so.
As pointed out above, the more dangerous the enemy is to you, the faster your archery skill will increase, just the same way as in other skills.
The more challenging something is - a higher lock level, a more dangerous enemy, a more complex potion or piece of crafted armor - the faster the skill will increase on a success. For instance, at Lockpicking 45 I picked a Master Lock, something that was very difficult, but it increased my Lockpicking by 3 points in one fell swoop.