"Good luck" doesn't necessarily mean that you aren't confident in the person. Everyone says that if they want to sound like they care how the person does. It's the most often-heard response to "I have an exam". However, if you want to use something other than "good luck", I also usually say "I hope it goes well (for you)". You can say that as well, and it sounds more like you're hoping the whole situation goes OK, and not just the person's ability to take the exam.

Depends on how much English they know. Assuming they got a good grasp of idioms, "break a leg" might go down better. A sort of reverse jinx, you might say.

I believe that you can

not say anywords ..

I always use this phrase: "good luck to you amigo!" (just my version). In our country, it is commonly expressed this way: "Kayang-kaya mo 'yan!" which is translated as "you can do it!" :)