A number of situations such as protein folding in confined spaces, lubrication in tight spaces, and chemical reactions in confined spaces require an understanding of water-mediated interactions. As an illustration of the profound effects of confinement on hydrophobic and ionic interactions, we investigate the solvation of methane and methane decorated with charges in spherically confined water droplets. Free energy profiles for a single methane molecule in droplets, ranging in diameter (D) from 1 to 4 nm, show that the droplet surfaces are strongly favorable as compared to the interior. From the temperature dependence of the free energy in D = 3 nm, we show that this effect is entropically driven. The potentials of mean force (PMFs) between two methane molecules show that the solvent separated minimum in the bulk is completely absent in confined water, independent of the droplet size since the solute particles are primarily associated with the droplet surface. The tendency of methanes with charges (Mq+ and Mq- with q(+) = vertical bar q(-)vertical bar = 0.4 e, where e is the electronic charge) to be pinned at the surface depends dramatically on the size of the water droplet. When D = 4 nm, the ions prefer the interior whereas for D < 4 nm the ions are localized at the surface, but with much less tendency than for methanes. Increasing the ion charge to e makes the surface strongly unfavorable. Reflecting the charge asymmetry of the water molecule, negative ions have a stronger preference for the surface compared to positive ions of the same charge magnitude. With increasing droplet size, the PMFs between Mq+ and Mq- show decreasing influence of the boundary owing to the reduced tendency for surface solvation. We also show that as the solute charge density decreases the surface becomes less unfavorable. The implications of our results for the folding of proteins in confined spaces are outlined.