Hún sagði að nóttin væri skýlaus og að fyrsta stjarnan væri bjartari en hún hafði búist við.

Væri is the past subjunctive of vera (to be). In this sentence, it is best understood as was in English:

• að nóttin væri skýlaus = that the night was cloudless
• að fyrsta stjarnan væri bjartari = that the first star was brighter

Depending on context, væri can sometimes correspond to English were or would be, but here it is part of reported speech.

Because this is indirect/reported speech after Hún sagði að ... (She said that ...).

In Icelandic, it is very common to use the subjunctive in clauses that report what someone said, thought, believed, or claimed, especially when the narrator is presenting it as her statement rather than directly confirming it as fact.

So:

• Hún sagði að nóttin væri skýlaus = she said the night was cloudless

Using var instead would sound more like a more direct factual statement from the narrator's point of view.

Because there are two parallel subordinate clauses:

• að nóttin væri skýlaus
• að fyrsta stjarnan væri bjartari en hún hafði búist við

So the structure is:

• She said [that X] and [that Y].

Repeating að makes the structure clear and natural. In some contexts Icelandic can omit the second að, but repeating it is very common and often clearer.

Because -in and -an are the suffixed definite article in Icelandic.

• nótt = night

• nóttin = the night

• stjarna = star
• stjarnan = the star

Icelandic usually attaches the to the end of the noun instead of using a separate word like English the.

In this sentence, the speaker is referring to a specific night and a specific first star, so the definite form makes sense.

Fyrsta is the form of fyrstur (first) that fits here.

It agrees with stjarnan, which is:

• feminine
• singular
• nominative

So:

• fyrsta stjarnan = the first star

This is normal adjective agreement in Icelandic.

Here skýlaus is a predicate adjective, used after vera (to be):

• nóttin væri skýlaus = the night was cloudless

Predicate adjectives agree with the subject. Here the subject is nóttin, which is feminine singular, and the correct form here is skýlaus.

Also, skýlaus is a compound word:

• ský = cloud
• laus = free from, without

So skýlaus literally means something like cloud-free or without clouds.

Bjartari is the comparative form of bjartur (bright).

So:

• bjartur = bright
• bjartari = brighter

The phrase:

• bjartari en ... = brighter than ...

works very much like English comparison.

Here en means than.

That is because it follows a comparative adjective:

• bjartari en ... = brighter than ...

Icelandic en can also mean but in other sentences, so learners often notice this. In this sentence, the comparative bjartari makes it clear that en means than.

Hafði búist við means had expected.

It is the past perfect of the verb búast við, which means to expect / to anticipate.

So:

• hún hafði búist við = she had expected

This is a fixed expression, so it is best learned as a whole:

• búast við = expect

Even though búa by itself has other meanings, búast við should be treated as its own idiomatic verb.

Because við is part of the verb búast við.

The sentence does not state the full object explicitly, because it is understood from the context. The idea is:

• the star was brighter than she had expected it to be

Icelandic leaves the understood part out, but keeps við because it belongs to the verb.

So búist við stays together as the meaning expected, even when the thing expected is not fully spelled out.

It takes the dative.

For example:

• Ég býst við þessu. = I expect this.
• Hún hafði búist við þessu. = She had expected this.

In your sentence, the object is omitted because it is understood, so you do not actually see the dative noun or pronoun.

Most naturally, yes.

The sentence most naturally means:

• She said ...
• and the star was brighter than she had expected

So the second hún is normally understood as the same woman. But, just like in English, context could in theory make it refer to a different female person. The grammar itself does not force it to be the same person; the context usually does.

Yes, it is completely normal.

In both subordinate clauses, the basic order is:

• subject + verb + complement

For example:

• að nóttin væri skýlaus
• að fyrsta stjarnan væri bjartari ...

And in the comparison clause:

• en hún hafði búist við

you again get a normal subject-verb pattern.

So although the sentence is fairly literary, the word order itself is standard Icelandic.

Because the sentence refers to two different past time levels.

• sagði = said
• hafði búist við = had expected

So first there was an expectation, and after that she spoke about what she saw.

This is exactly like English:

• She said that the first star was brighter than she had expected.

The past perfect hafði búist við shows that the expectation happened earlier than the act of saying.