Answer:
In the forest, this blends in just right, but every December it is covered with lights. What is it?
My first master has four legs, my second master has two. My first I serve in life, my second I serve in death. Tough I am, yet soft beside. Against ladies cheeks I often reside.
Neither bought nor sold but more valuable than gold. It is built but not by hand. What is it?
It cannot be seen, it weighs nothing, but when put into a barrel, it makes it lighter.
What gets wetter as it dries?
I am owned by Old McDonald.