Probably because he's running away from loansharks and if he comes back, he will be killed. Basically, it is the latter: He doesn't want help, just the freedom to keep on losing in life. I think Frank at that point decided to be a Judge Joey and cut him off.

Yep, I think that whole end part with Larry was Frank finally accepting facts about him. Him telling Cool he wasn't coming back was him not covering for Larry anymore. He wanted to do what was best for the kid - which is a major change in attitude for him.

I think Frank didn't want Cool to wait for Larry, constantly getting hurt and disappointed. Who knows how long Larry will be away? In the beginning of the movie Gil told him, "How long's it been, three years?". Imagine Cool waiting for him that long, then when he's supposed to show up he flakes out last minute. It's better that the kid never expects him back.