"Je ziet er prachtig uit in die nieuwe jurk."
Translation:You look gorgeous in that new dress.
why isn't "nice" acceptable. Does prachtig signify something stronger than nice?
I understood mooi to mean beautiful rather than nice (leuk) and so also much stronger than nice. Is that correct?
No, I think "mooi" and "leuk" are roughly the same intensity. It's just that "mooi" is used mostly for pleasant sights (like the English "pretty") or sounds, whereas "leuk" refers mostly to enjoyable experiences or events.
In the context of looking good, I feel leuk to be just a little weaker than mooi. In the sentence 'Je ziet er X uit', here's my internal ranking (increasing) of some values for X: goed (good/fine), leuk (nice/pretty), mooi (pretty/beautiful), heel (very) mooi, erg (very) mooi, heel erg (exceptionally) mooi, prachtig (gorgeous), fantastisch (fantastic).
Of course, other people's internal rankings can differ, and culture/sarcasm could play a role too.
I don't think you can do a direct mapping between leuk, mooi, and English nice,pretty,beautiful. I'd rank them nice,leuk,pretty,mooi,beautiful.
So I do see where you come from with 'beautiful' being stronger than 'nice', but the gap between 'mooi' and 'prachtig' is really much wider than between or even 'nice'/'pretty'/'beautiful'.