Dragon events
when the dragon loses the target icons, it means it’s not stunned. when not stunned, it takes far less damage. To stun it, it varies on the dragon. claw of jormag, for example, has those golems drop explosives below it. enough get through and it gets stunned.
Mystic’s Gold Profiting Guide
Forge & more JSON recipes
it only takes something ridiculous like 1-2k damage dealt to the dragon or its minions to get “gold” contribution and be eligible to loot the chest afterwards.
And as far as I am aware the loot these chests give is not dependent on how much further damage you did beyond the amount needed to qualify for bronze event medal.
As for the actual difficulty of targeting the dragon, it varies, I often find I accidently click off due to using mouse turning but other than that the only times I “loose” targeting is when the dragons do one of there many attacks that breaks targeting and makes them immune to targeting for the duration, once these attacks are finished the target points on there heads and chests appear again.
Also in general as long as your facing in the direction of its claws/head your character will auto target them (much more reliably as melee).