The mood of this scene is very light hearted and full of theatrical comedy. We find Sir Toby, Sir Andrew and Fabian hidden away as they await Malvolio to stumble upon the letter supposedly written by Olivia. Even though they are hidden, the audience can still see their reaction and hear their vivid comments, which adds to the melodramatic aspect of the scene.
Malvolio's entrance to the scene immediately creates comedy because we find him fantasizing about being "Count Malvolio", and this notion creates humour as it seems that Malvolio has forgot he is merely Olivia's steward not her social equal. As Malvolio speaks about himself, certain that he’s alone, the onlookers insult him and this adds even more comedy.
The language used in this scene is really important because they use rough and direct terms, on purpose, to make people laugh.
One of the most striking example is the wordplay or better, the “letterplay” that Malvolio does when he’s reading the letter.
‘By my life, this is my lady’s hand: these be her very c’s, her u’s, and thus makes she her great P’s. It is, in contempt of question, her hand.’
Shakespeare put into these lines a crude joke. Elizabethans knew that “cut” was slang for the female genitals, and they would hear “P’s” as “pees”, and they would probably find it very funny that Sir Andrew fails to see the dirty joke.
However, even though this scene is full of jokes, actions that make the audience laugh, and comedy, we can also find elements linked to Tragedy.
Malviolio's soliloquy by itself provides interesting insight into Malvolio's character, plus the soliloquy is very unusual for a comedy, because we usually find monologues in Tragedies. Throughout the play, Maria and Sir Toby have described Malvolio as sort of a wet towel, quashing all of their revelry and fun. Indeed, this soliloquy reveals that Malvolio takes even seemingly hilarious and light-hearted things far too seriously, and it also reveals his pride and the high regard that he holds himself in. After reading the letter, Malvolio believes that he has discovered Olivia's love for him.
The Malvolio’s believing and his self-love is what in tragedy we call Hamartia, i.e an error the character makes and provokes tragedy, but the fact is that Malvolio is not a noble character and no one cares about him, so to a certain extent we can’t really say that his soliloquy and his character belong to the Tragedy genre.
Another view to note is the absence of Maria in this scene and we could relate it with the fact that in tragedy women don’t really have an important role.
Act three scene one is a completely different situation. Viola, disguised as Cesario, has come to plead Orsino’s case with Olivia but she comes across Feste and she sits in Olivia’s garden, chatting with him and playing innocent game of verbal sparring. When Feste goes asking for her Lady, Sir Toby and Sir Andrew enter and joke with Cesario, but whereas Cesario and Feste entertained the audience with high comedy, Sir Toby and Sir Andrew indulge in low comedy. Then Olivia and Maria enter, and Olivia quickly dismisses Maria, Uncle Toby and Sir Andrew so she can be alone with Cesario.
Olivia confesses her feelings to Viola, and she desperately wants to hear words of love from him; she begs him to speak, however all Cesario can reply is that he pities her.
The relationship between comedy and tragedy in this scene is much more amplified, and palpable, above all the speech between the two ladies.
The fact that Olivia is in love with Cesario, who’s actually a woman who is in love with Orsino, is tragic to such an extent that it becomes comedy.
Viola, disguised as Cesario is, without doubt, a comedy aspect and the love Olivia feels for her/him makes the audience laugh even more.
The language used in the first part of the scene by Viola, Feste, Sir Andrew and Sir Toby is witty and used accurately to make people laugh, which contrasts with the second part of the scene, when Olivia opens her heart to Viola.
The language used by these two is refined and often exaggerated, and the audience feels sorry for Olivia, which hamartia is nothing but being in love.
In the end I would say that there are a lot of elements of Tragedy in these two scenes of Twelfth night, but these aspects are always linked to comedy, therefore I would call this play tragicomic.