There are a lot of problems with the discussion here the first is regarding the use of of photos. When taking a picture of a bright light source a lens with often experience lens flare as a result of scattering within in the lens system. This can look like a halo around the light, smearing of the light or depending on the angle that series of circles running through the frame that computer games use. I took a nice picture (if I do say so myself) of the sun last year for my desktop just for the lens flare. It gave the sun a nice halo and softened the edge with the sky quite nicely. Of course with a camera you also have the effects of discretization, by which I mean a pixel is either hit or it isn't, there is no integration over time.
This can also occur in the human eye, the results are less spectacular as the eye has a very simple optical system, also I guess the brain acts as an aberration corrector to some extent, though I don't really know about that bit. This is what we call glare. So typically the effect is not as bad with the human eye, something I did actually look for last night, though I don't have a camera to compare it with. Though I had little trouble seeing lights far away looking smaller. Although this is not the only effect going on in these photos.
I suspect the main effect in this pictures is neither glar or lens flare (though you can see some lens flare) but multiple scattering from the rain/fog. Now we do see this effect with the sun when its a cloudy day we don't see the sun we just see the dull Grey colour which is because the suns light is being multiply scattered through the cloud. In a clear sky multiple scattering makes the sky look blue its why the dawn/dusk even looks red. Infact it looks redder if there is some kind of pollution/volcanic eruption/weather to make sore scattering hence those red sky at night blah de blah. Something the brightness of the sun doesn't just make it look a little bit bigger it changes the whole colour of the sky, I think theres a misconception of scale here. Using car lights to look study the sun is like doing nuclear physics by looking at a candle.
Finally not that it matters but magnification most definitely does not equal dispersion. But thats not really relevant as I don't see magnification or dispersion in those photos. I hate to admit it but the wiki page on dispersion is fairly well written.