1) The close burst 1 hits blue and red, but not yellow. Neither blue nor red has cover.
#2 depends on #3, but if you assume that D&D uses a 3D grid of cubes instead of a purely 2D map (never explicitly stated, but how else can you have elevation and flight?), then the answers are:
2) Yes, this is the same as the first wizard hitting red -- adjacent but around a (vertical) corner.
3) Yes, bursts and blasts extend up and down as well as to the sides.
The relevant rules are from PHB p.272-273, 280:
Counting Distance: When counting the distance from one square to another, start counting from any adjacent square (even one that is diagonally adjacent but around a corner) and then count around solid obstacles that fill their squares. You must choose the most direct path to a target when counting squares for range or when determining the extent of an area of effect.
Adjacent Squares: Two squares are adjacent if a side or a corner of one touches a side or a corner of the other. Two creatures or objects are adjacent if one of them occupies a square adjacent to a square occupied by the other.
Burst: A burst starts in an origin square and extends in all directions to a specified number of squares from the origin square.
Determining Cover: To determine if a target has cover, choose a corner of a square you occupy (or a corner of your attack’s origin square) and trace imaginary lines from that corner to every corner of any one square the target occupies. If one or two of those lines are blocked by an obstacle or an enemy, the target has cover. (A line isn’t blocked if it runs along the edge of an obstacle’s or an enemy’s square.) If three or four of those lines are blocked but you have line of effect, the target has superior cover.
So a close burst 1 counts one square from the origin square, starting with any squares that are adjacent, even around corners. Both red and purple are in squares adjacent to the origin square (squares are adjacent if a corner or edge touches), so they'd both be affected.
Red and blue also don't have cover, because you can measure cover from any corner of the origin square, and the wizard would just choose the corner shared with the target square.