Make sure your answer does not get lost in a story. If it were me, I would start by outlining skills/characteristics you poses and want the adCom to know about you. Than I would pick the tasks/experiences at work that will allow you to showcase those skills and I'd write about them through specific examples. Remember, it is not the activities that matter but your personality/skills you show through them.
Be careful with the ethics example - it is a common essay for many schools and so don't give the AdCom a reason to wonder if you wrote about it just to use the work from other applications. So, to answer your 1st Q - I do not htink that one of the 3 activities should be "how I handled an ethical dilemma at work place". However, you can work it in indirectly. Here is a BS example: one of the activities you perform is quality control of a product. To do it well, you are a detail oriented, dedicated blah blah...Although at first we may think that QC is a relatively easy/enjoyable task, for you it proved to be one of the most challenging - one time during QC you were faced with an ethical dilema - listen to your suprvisor and deliver a substandard product in order to meet a deadline or.... and so on.
hope this helps