I have observed that WiFi routers with 2 antennas have a better coverage than a router with a single antenna. How does that work out? 

I can clearly make out that the second antenna is definitely not a repeater kind of thing, or is it? 

Absolutely related: https://electronics.stackexchange.com/q/81621/74840 

The answer in the question sited above speaks of Noise cancellation. I can correlate that to Efficiency in terms of reception quality, packet loss, etc, but not to the signal strength.