Good. I knew the exercise would be easy for you.
You ar right in pointing out the close similarities of the chords build on the 5th and 7th scale degrees. In regards to the study of harmony and not counterpoint, the rule is that the customary resolution of the V chord is to the I chord and any other resolution is "deceptive". The customary resolution of the diminished chord on the 7th degree is to the I chord as well and usually in its 1st inversion. But that will come later. The reason for this is because the strong tendencies of the note B in both the V chord and the vii' chord in C major. The note B is the leading tone. The leading tone's natural tendency is to resolve up to the Tonic. It has the "feeling" that is wants to "lead" back to the Tonic. With the diminished chord B-D-F, you have the dissonant relationship of the tritone B to F. The tension in this relationship adds to the feeling for the Leading tone B to resolve up to the tonic and the IVth degree to resolve down to E. You will again see this later when we start talking about V7(Dominant 7ths).
Does this make sense?
If so let me know and we can go on.
