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API name is what you'll use to call the field from the API. It has to be unique and IIRC it cannot have spaces.
Nothing critical here: if you're field is called "eye color" your API name would normally be EyeColor. Capitalize each word and remove the spaces.
The API name would be the name an external program would use to communicate with Marketo. For example, we have a licensing server that talks to Marketo through the API.
I don't know of a standard convention but for API name we use the field name with underscores in place of spaces. So if your field name is:
Customer Shoe Size
our API name is:
some people remove the space altogether: CustomerShoeSize
hope that helps
If Marketo is synched to a CRM, and you want this field to be synched to your CRM and not just a Marketo-only field, you should create the custom field in your CRM and make it visible to the Marketo Synch profile. It will then be created automatically in Marketo.