[BUG] Lower land spell only cosmetic!

Bug 2 - Yeah, that's bothered me for a while as well.  The actual functionality of the expanded borders is there, but you can't see it graphically represented.  You can force it to update by choosing to build on a resource node if there is one (you can then cancel it and the graphical update is still applied).  I haven't found any other workaround, although it's only a workaround if you know that the borders have expanded.

Bug 3 - I've used Lower Land successfully in the beta so far.  AI player had his town blocking the only path between a lake and a mountain, so I carved a path through the mountain.  I used it only once on each of 6 tiles and walked through, no problems.  

In you third screenshot, it looks like you're walking through the path you carved.  Where did you encounter the problem?  Have you looked it it from a more top-down perspective?

It has always (since FE beta) taken me a lot of castings of Lower Land to get a usable path through the mountains. Turn on the grid (display options) to see what is and what isn't considered flat land, and continue casting lower land until you see a path of grid cells through the mountains.

POST> (and no new road is built through the passage connecting the towns either)

Haven't tried LH yet, but in FE you NEVER got a new road between cities when they were connected before, no matter how roundabout that connection was.

And once you've turned on the grid, if you go into the cloth map, it's really easy to see what's been affected.

Remember that Lower Land only works on one tile at a tile.  You cast it on the tile you want to become traversable.  If you are trying to get through a mountain 3 tiles wide, you have to cast it 3 times, once on each tile.

Also, like mmilleder said, you're not going to get a new road.  That's just not something that's supposed to happen.