Burial next to spouse

If a person remarries after divorce outside of WELS faith, should they be buried next to their previous WELS spouse or more recent spouse? And does it even matter?

The personal preferences of the individuals involved will determine the course of action.

As you note in your second question, the significance of whatever action is taken is short-term. It will matter to relatives of the deceased only.

Much more important is what Jesus says about death and resurrection: “…a time is coming when all who are in their graves will hear his voice and come out—those who have done what is good will rise to live, and those who have done what is evil will rise to be condemned” (John 5:28-29). Christian faith saves and unbelief condemns (Mark 16:16). People display faith and unbelief in everyday living (Matthew 25:31-46).