How to control Arduino using mBlock and Bluetooth?
When I connect HC-05, should I connect Tx to Tx OR reverse them?
  
  
  There are varying articles describing both ways of connection.
  
  


Yes, swap them. TX on the HC-05 to RX on the Arduino. However you could struggle to use pins 0/1 since they are the USB connection. SoftwareSerial (which is nasty) is what most people use instead.


  
  How much baud rate do I need to set on the bluetooth device?
  


Whatever rate you want to communicate at. It's up to you. However all baud rates must match throughout the system - the baud rate on the Arduino, the baud rate of the HC-05, the baud rate of the SPP port on your PC, etc.


  
  Do I need to use the voltage divider for Rx? Again there are varying tutorials.
  


Which RX? Arduino TX to HC-05 RX yes. HX-05 TX to Arduino RX no.


  
  Is mblock default arduino firmware sufficient for such a setup?
  


What is mblock?