Giving a reason for leaving a job isn't easy. I've been in this situation before. I said it was to take care of an ill relative. Not really true. I was depressed. Coming out and saying that you were suffering from depression is hit or miss. Some people get it and empathizes others may see you as a liability. Personally, I'd make something up. Perhaps you could say your were ill but are fine now. They generally aren't rude enough to ask what the illness was and you don't have to tell them.
With regards to what can be said in a reference, I've read (I'm in Canada) that an employer can't give you a bad reference. However, they can be vague and potential employers have a work around by asking the former employer multiple choice like questions. The reason is that unless you were fired for cause - meaning they officially told you what you did wrong in writing thus giving you a chance to defend yourself - then any negative comments can be construed as slander.
Many employers know this so instead of asking for an email or letter reference they ask the employer to grade the person on a scale of say 1-5 on various attributes and abilities. Punctuality, efficiency, etc. This allows for an honest appraisal without the former employer risking saying anything that could be considered slanderous.
If a former employer does an email or letter reference, it usually has three parts. The first part is the name of the position and confirming how long you worked there. The second part explains your job duties that you were expected to perform. The third paragraph states how effective you were in this position. They can make it vague like "they were effective in this position and completely their duties adequately" or they can go on and on about how wonderful you were.
A suggestion. After a potential employer asks for your references, email your previous employer to give her a friendly heads up that she'll be contacted for a reference. Let her know the name of the company, the position you're applying for and how excited you are about the job. Explaining to your former employer how happy you were with the interview and the potential new job, may encourage her to give you a great reference.
Hope that helps. Best of luck.