What version of Moodle are you using?
You can hide anything in the gradebook from students, just look for the hide (eyeball) icons on the categories and items tab.
As I understand it, custom scales are automatically assigned a point value (I've never fully understood how this works).
To change how items are shown to students, you'll want to adjust the "grade display type" settings, which can be accessed from the settings (gear) icons on the categories and items tab, as well as on the settings tab of the gradebook. In your case, you probably want to show just the "letter" grade, and not "percentage" or "real."