I'm playing the prison break mission. Every turn or so it will ask to "Place 1 cave spider" (or other monster). The AI for that monster acts as if its an entire group with masters and minions. Should I have placed a single monster, or an entire monster group?

One at a time. Even if it seems like the app should know if you don't have a minion or a master on the board the app will always give you instructions for both.

And when you place a Unique, it will always act like you placed the entire group, so if you Defeat Unique, you'll be left with Minion monsters listed when no minions were placed. That's why I just "defeat group"