Spike Trap and Cast into the Underworld

Other Games SotM Game Engine
1

Spike Trap reads: "... At the start of the environment turn, deal the target with the lowest HP 3 melee damage."

First question: Who deals the damage? This card?

Cast into the Underworld read: "Increase damage dealth by environment targets by 1..."

Second question: Spike Trap is not a target (it has no HP), so it's damage will not be increased?

2

Typically, if not stated, it's assumed that the card is the source of damage.  And you are correct!  Since it is not a target the damage is not increased.