Explanation
The User Access Administrator role allows you to manage user access to Azure resources.
Reference:
https://docs.microsoft.com/en-us/azure/role-based-access-control/built-in-roles#user-access-administrator

Box 1: Remove the public IP address from VM1
If the Public IP on VM1 is set to Dynamic, that means it is a Public IP with Basic SKU because Public IPs with Standard SKU have Static assignments by default, that cannot be changed. We cannot associate Basic SKUs IPs with Standard SKUs LBs. One cannot create a backend SLB pool if the VM to be associated has a Public IP. For Private IP it doesn't matter weather it is dynamic or static, still we can add the such VM into the SLB backend pool.
Box 2: Create and configure an NSG
Standard Load Balancer is built on the zero trust network security model at its core. Standard Load Balancer secure by default and is part of your virtual network. The virtual network is a private and isolated network.
This means Standard Load Balancers and Standard Public IP addresses are closed to inbound flows unless opened by Network Security Groups. NSGs are used to explicitly permit allowed traffic. If you do not have an NSG on a subnet or NIC of your virtual machine resource, traffic is not allowed to reach this resource. To learn more about NSGs and how to apply them for your scenario, see Network Security Groups. Basic Load Balancer is open to the internet by default.

Reference:
https://docs.microsoft.com/en-us/azure/load-balancer/quickstart-load-balancer-standard-public-portal
https://docs.microsoft.com/en-us/azure/load-balancer/load-balancer-overview

Explanation
https://www.cloudelicious.net/azure-vms-and-their-temporary-storage/
https://docs.microsoft.com/en-us/azure/virtual-machines/troubleshooting/redeploy-to-new-node-windows#:~:tex

Box 1: Yes
The inbound security rule for NSG1 allows TCP port 1433 from 10.10.2.0/24 (or Subnet2 where VM2 and VM3 are located) to 10.10.1.0/24 (or Subnet1 where VM1 is located) while the inbound security rule for NSG2 blocks TCP port 1433 from 10.10.2.5 (or VM2) to 10.10.1.5 (or VM1). However, the NSG1 rule has a higher priority (or lower value) than the NSG2 rule.
Box 2: Yes
No rule explicitly blocks communication from VM1. The default rules, which allow communication, are thus applied.
Box 3: Yes
No rule explicitly blocks communication between VM2 and VM3 which are both on Subnet2. The default rules, which allow communication, are thus applied.
Reference:
https://docs.microsoft.com/en-us/azure/virtual-network/security-overview

Explanation
You would need to Redeploy the VM.
References:
https://docs.microsoft.com/en-us/azure/virtual-machines/windows/redeploy-to-new-node