Supposing I wanted to say "I see the fireworks at the summer festival". Would this be:
夏{なつ}祭{まつ}りで花{はな}火{び}を見{み}ます。
or
夏祭りに花火を見ます。
If both are correct, how does the meaning differ between each?
Supposing I wanted to say "I see the fireworks at the summer festival". Would this be:
夏{なつ}祭{まつ}りで花{はな}火{び}を見{み}ます。
or
夏祭りに花火を見ます。
If both are correct, how does the meaning differ between each?
Yes, both are correct.
The differences are:
Both are correct, but my reasoning will differ from @S.Wakisaka's.
「夏祭りで花火を見る」 treats the summer festival as a spatial point (location) for watching fireworks.
「夏祭りに花火を見る」 treats the summer festival as a temporal point (timing) for watching fireworks.
Starting around 0:25 in the video below, hear this singer say 「秋祭{あきまつ}りに買{か}った指輪{ゆびわ}、小指{こゆび}にしています」.