Is Magome a better place to spend a night? More activities during the night in Magome?There is no "night life" in either Magome or Tsumago, at all. Most accommodation are minshuku where you don't do much more than talk, read and sleep after dinner. Many do not even have a TV on the guest rooms.
Any restaurants serve dinner at night? And breakfast in the morning?
I don't think so, because the minshuku include dinner and breakfast with the overnight stay.
Transportation wise, is it easier to get a bus and return to Nagoya from Magome or Tsumago?
Magome has more bus connections to the nearest station (Nakatsugawa) than Tsumago (to Nagiso Station), but it is possible to walk from Tsumago to Nagiso Station in about an hour, while walking from Magome to Nakatsugawa is less feasible. Alternatively, it is possible to walk from Magome to the nearby expressway bus station in about 15 minutes, from where there seem to exist some direct bus connections to Nagoya.