Magnesium-based films and nanostructures are being studied in order to improve hydrogen reversibility, storage capacity, and kinetics, because of their potential in the hydrogen economy. Some challenges with magnesium (Mg) samples are their unavoidable oxidation by air exposure and lack of direct in situ real time measurements of hydrogen interaction with Mg and MgO surfaces and Mg plasmonic nanoparticles. Given these challenges, the present article investigates direct interaction of Mg with hydrogen, as well as implications of its inevitable oxidation by real-time spectroscopic ellipsometry for exploiting the optical properties of Mg, MgH2 and MgO. The direct hydrogenation measurements have been performed in a reactor that combines a remote hydrogen plasma source with an in situ spectroscopic ellipsometer, which allows optical monitoring of the hydrogen interaction and results in optical property modification. The hydrogen plasma dual use is to provide the hydrogen-atoms and to reduce barriers to heterogeneous hydrogen reactions.