There are so far three historically verifiable schools, Togakure Ryu (the only one publically taught), Kumogakure Ryu, and Gyokushin Ryu. Each individual intructor will have their own teaching style. When I taught, my lessons were very different from my instructor's.
"So, ninpo instructors will mainly teach taijutsu or hand to hand combat?"
Correct. Even the ones who teach other things will want you to learn the basics first.
"I imagine the ninja being able to do things like walk on paper rice like in the TV show Kung Fu."
At my school we do practice stealth, but not with rice paper. We normally train in the park and dired leaves work well for this. My last instructor did not care for any of this. It all really depends on whether the individual instructor likes to or not.
"In your training are they teaching you hypnosis and mental development stuff?"
My formal hypnosis training is from NLP Trainings Unlimited and Essential-Skills. I also train with books, audios, and videos. Some instructors teach this stuff but none I've trained with do. I'm the only one in my dojo with such training.
If by mental development you mean sixth sense development, that is hard to explain. It sort of develops naturally through our physical training. I have a friend who is very good at it who taught me, but as far as I know it is not formally taught. For the most part it just develops as you train.
"Did you ever meet Frank Dux or come across his style? Do you know a lot about him? I know he wrote a book called Secret Me I think."
There was an expose' in Soldier of Fortune Magazine a few years ago on him. It appears his CIA, ninja, etc history was all made up.