You can't dilute urine, because the only thing you'd have to dilute it with is tap water, and that would show up on the urinalysis. Urine does not contain H2O. It's been chemically changed by the time it comes out as urine.
Urine is yellow due to the presence of a pigment called urobilin. When urine is dilute,its colour becomes light due to the abundance of water. Dark yellow urine shows that the urine is concentrated which is because of dehydration.
since your bodies goal is homeostasis the more fluids in, the more out. Certainly metabolic rates and diet can have an effect, but generally speaking your body produces more dilute urine during daytime.
No. They can only dilute urine. Drinking a large amount of a diuretic (coffee, cranberry juice, etc.,) on the morning of the test can dilute the urine enough to get below the threshold which gives a positive result. See Erowid.com