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Confidence votes 317. Inertia is rotary momentum; an object's ability to continue spinning when a decelerating force is applied. Just as a heavy object takes more effort to stop from the same speed as a light object, so does a heavy object take more effort to stop from turning at the same speed as a light object. So assuming they are turning at the same angular velocity, the heavier one has a larger inertia.
It decreases with the square of the distance, but there is a gravitational force acting on every object. Weightlessness is caused because the spacecraft and everything inside is travelling in orbit and so everything is effectively falling at the same rate.