Expressiveness, and more recently, succinctness, are two central concerns of finite model theory and descriptive complexity theory. Succinctness is particularly interesting because it is closely related to the complexity-theoretic trade-off between parallel time and the amount of hardware. We develop new bounds on the expressiveness and succinctness of first-order logic with two variables on finite words, present a related result about the complexity of the satisfiability problem for this logic, and explore a new approach to the generalized star-height problem from the perspective of logical expressiveness. We give a complete characterization of the expressive power of first-order logic with two variables on finite words. Our main tool for this investigation is the classical Ehrenfeucht-Fra¨ıss´e game. Using our new characterization, we prove that the quantifier alternation hierarchy for this logic is strict, settling the main remaining open question about the expressiveness of this logic. A second important question about first-order logic with two variables on finite words is about the complexity of the satisfiability problem for this logic. Previously it was only known that this problem is NP-hard and in NEXP. We prove a polynomialsize small-model property for this logic, leading to an NP algorithm and thus proving that the satisfiability problem for this logic is NP-complete. Finally, we investigate one of the most baffling open problems in formal language theory: the generalized star-height problem. As of today, we do not even know whether there exists a regular language that has generalized star-height larger than 1. This problem can be phrased as an expressiveness question for first-order logic with a restricted transitive closure operator, and thus allows us to use established tools from finite model theory to attack the generalized star-height problem. Besides our contribution to formalize this problem in a purely logical form, we have developed several example languages as candidates for languages of generalized star-height at least 2. While some of them still stand as promising candidates, for others we present new results that prove that they only have generalized star-height 1.