How to expand/collapse a diff sections in Vimdiff?

Aside from the ones you mention, I only use frequently when diffing the following:

• :diffupdate :diffu -> recalculate the diff, useful when after making several changes vim's isn't showing minimal changes anymore. Note that it only works if the files have been modified inside vimdiff. Otherwise, use:
  • :e to reload the files if they have been modified outside of vimdiff.
• :set noscrollbind -> temporarily disable simultaneous scrolling on both buffers, reenable by :set scrollbind and scrolling.

Most of what you asked for is folding: vim user manual's chapter on folding. Outside of diffs I sometime use:

• zo -> open fold.
• zc -> close fold.

But you'll probably be better served by:

• zr -> reducing folding level.
• zm -> one more folding level, please.

or even:

• zR -> Reduce completely the folding, I said!.
• zM -> fold Most!.

The other thing you asked for, use n lines of folding, can be found at the vim reference manual section on options, via the section on diff:

• set diffopt=<TAB>, then update or add context:n.

You should also take a look at the user manual section on diff.

Actually if you do Ctrl+W W, you won't need to add that extra Ctrl. Does the same thing.

set vimdiff to ignore case

Having started vim diff with

 gvim -d main.sql backup.sql &

I find that annoyingly one file has MySQL keywords in lowercase the other uppercase showing differences on practically every other line

:set diffopt+=icase

this updates the screen dynamically & you can just as easily switch it off again