Box 1: Yes -
DNS queries from the internet use the public DNS zone. In the public DNS zone, www.fabrikam.com is a CNAME record that resolves to appservice1.fabrikam.com which resolves to 131.107.1.1.
Box 2: No -
DNS queries from the internet use the public DNS zone. There is no DNS record for server1.fabrikam.com in the public DNS zone.
Box 3: No -
The private DNS zone is linked to VNet1, not VNet2. Therefore, resources in VNet2 cannot query the private DNS zone.