Serbia

Standard languages are similar due to movement of unification of South Slavic nations in mid-19th century.

Shortly;

Croatian langauges has 3 literature vernaculars: Kajkavian, Chakavian and Shtokavian and each of them has many dialects. Serbian has Torlakian and Shtokavian. Shtokavian in Croatia and Bosnia is called "Western Shtokavian" and in Serbia "Eastern Shtokavian". The basis for the standard languages in Croatia and Serbia (and other neighbour countries but not all) was chosen Shtokavian vernacular as it was at the moment in mid-19th century the most spread one. And later in 20th century many nations joined into one Yugoslav country which was called Kingdom of Yugoslavia then Social Federal Republic of Croatia and inside these countries two most influential nations were Croats and Serbs, thus there were desires from some people to merge this two languages into one, which was impossible due to 8 centuries long tradition of Croatian vernaculars and Serbian vernaculars.

The reason Croatian and Serbian standards or Shtokavian dialect have many words is also historic one - because of Ottoman Empire many nations fled to the west, thus Serbs as well and there was mixture of language. Shtokavian vernacular now spread to the west more than it was in history.

As for Croatian language (I'm Croat and I don't know Serbian language history that much), each of our vernacular can be considered as single langauge. What is more, Kajkavian has it's own grammar and Kajkavian was until mid-19th century considered as Croatian language in international circles. People from different vernacular (and dialect) regions cannot understandeach other much unless using standard langauge.

Northern Croatia is mostly Kajkavian and it has a huge influence of German and Hungarian language due to historic events. People in Northern Croatia had been learning Hungarian and German for a long time while in last 120 years the common thing was to know German more. There are around 3000 words from German in Croatian, especially Kajkavian, though we tend to use our own words since independence (it's like English has more than 60% of foreign words and instead of using "vocabulary" the germanic word should be like "wordstock").

Litoral Croatia (Chakavian) has had huge influence of Romance languages, especially Italian due to 1000 years of sharing cultures with Italian peninsula (and wars as well). If you visit Istria, Kvarner, Lika or Dalmatia (and islands along the coast) you will notice in local's speech many italian words which have been preserved for centuries.

Eastern Croatia (and Bosnia and Herzegovina) has Shtokavian which is most mutually intelligible with Serbian dialects. It is also the vernacular with the highest percentage of Turkish words due to historic events (read more about Croatian-Ottoman wars).

So, since Shtokavian is used as basis for both Croatian and Serbian, we are able to understand each almost perfectly. When we speak to each other, it sounds like dialect. Serbian has still huge amount of words that are different from ours and even the words that look like the same different in 1-2 voices/letters, but we don't mind it as we can guess from context.

Imagine it like in Spanish and Portuguese, la mujer vs a mulheror in English and German: I drink Water vs Ich trinke Wasser. Now imagine if I add the Dutch language, which is so confusing to learn at first if you have knowledge of English and German, it's just int he middle but it's special language (and I like it).

Standards are really more similar than these examples, however Croatian vernaculars are more like example: la leche vs il latte or la fresa vs la fragola.

The war started on July 28 1914, Serbia was in alliance with Russia.

improved:

and russia, was in alliance with Britain and France. (the triple entente).

Germany, austria-Hungary and Italy were also in an alliance (the triple alliance).