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The general consensus is that two coats of stain are required and since the cedar is siding, a third coat of sealant is always a good idea. This helps protect the wood and stain, so you won’t need to resand and restain for at least a decade. Each stain after the first will darken the wood, so be aware of that when choosing a colored stain.

You can apply stain over peeling stain, but it’s not a good idea. Your old stain will get in the way of your new stain bonding to the wood, so you’re likely going to see the same issue again shortly after application. Your best option is to sand off the old stain and clean the surface thoroughly before applying new stain.

You can only change your neighbor's fence with their permission. A neighbor's fence is their property, and altering it without their consent could constitute trespassing or property damage, which may have legal consequences. If you have concerns or disagreements about your neighbor's fence, communicate with them openly and try to reach a mutually agreeable solution. If you believe the fence violates local zoning laws or property regulations, consult with local authorities or seek legal advice to address the issue through proper channels. 

If possible, it is beneficial to paint both sides of your fence to protect the fence more completely from the elements. Painting both sides of your fence will create a more consistent appearance as well. However, the time and cost involved in painting both sides of the fence may cause people to paint only the side they see.