Hi, if you think about it, being that most things expand equally in all directions, unless otherwise restrained, think of the metal bar in a vice being heated up and then just drops out when it cools without opening the vice, then take the amount that the metal would expand towards the hole compared to the circumference of the hole, then it stands to reason that the inside of the hole will expand a greater distance and will have to become bigger. Of course, this is assuming that the whole piece is heated uniformly, because if it was only heated around the hole, it would be restrained by the cold metal surrounding it and the expansion would be greater sideways and the hole may even stay more or less the same size.
As for water does it really expand when it freezes? water becomes ice when it freezes, so maybe it can be considered no longer water. Ice of course is less dense because it expands and is lighter than water for the same volume, hence it floats on water.
Change of state and all that.
Regards Nick.