Firstly, thanks for the long reply mate
The Nernst Equation that you have used is currently not in my syllabus and Ive never seen it before.
But from what u have explained, its rather comprehensive and I could understand it.
After some thoughts, I remembered that my teacher had used Le Chatelier's Principle(LCP) to explain this sort of question to me before.
Therefore, am I right to explain the answer in this way below:
1 is correct because, additional of water to Fe2+/Fe3+ cell would just make the concentration of [Fe2+] and [Fe3+] change by the same ratio and hence, by LCP, there is no shifting of equilibrium and E
0 stays the same.
2 is wrong because addition of NaOH to Mg2+ cell would result in some form of precipitation of MgOH and that decreases concentration of Mg2+ in water. Or if no precipitation, there will nonetheless be dilution due to the Aqueous state of NaOH. Hence, according to LCP, this decrease in [Mg2+] would then result in the equilibrium shifting more to the right to produce more of the Mg2+ so that to increase [Mg2+] once again. Shifting of the equilibrum to the right would result the Forward reaction to be more feasible, and hence, cell potential increases.
So are my explanation valid?
Thanks once again.