Make an infinite supply of snowballs
Solution 1:
The infinite supply bug (Which I think they actually added on purpose) still works fine. Your problem there is rather simple, you just forgot to capitalise the "C" in "count". This should work properly:
/summon Item ~ ~ ~ {Item:{id:minecraft:snowball,Count:128}}
The wiki has some nice pages on NBT data which I use to get the format and names right: http://minecraft.gamepedia.com/Player.dat_Format (Players and items) http://minecraft.gamepedia.com/Chunk_format (Everything else)
Doing 5 hearts of damage is not something that NBT data can do to a snowball; I don't even think any data is carried over from the snowball item to the thrown snowball entity. The best you could do is perhaps have a fast clock with this on it:
/execute @e[type=Snowball] ~ ~ ~ /effect @p[r=2] 7 10 1
Which would make a thrown snowball constantly give players within 2 blocks (changeable) instant damage II for 10 ticks. The thrower would also likely take damage though, and it would be subject to lag.