Literature review
Many texts on student projects suggest that the purpose of the literature review is to show that you have done your background research. This explanation assumes that there is some external expert who is looking to find fault with your work and it is you who are the subject of the attention. This is not a constructive way to approach writing your report.
The purpose of a major student project (Honours or Masters dissertation) is to mark the transition from being a novice to being a competent practitioner. The best projects will include some novel element that your markers have not seen before, and in that respect you are teaching them something. Even in a project that barely passes, there should be some interesting practical problem-solving, and so again there are things that the markers may be interested in for their own value. In this perspective, it is the subject matter of the project that is the focus rather than you. Instead of the project report being some kind of test, from this perspective it becomes a communication between equals.
The Reader
There is only ever one reason to write a report, and that is so that someone else can read it. As soon as you recognise that a written document is a form of communication, then you can start to think about how to ensure the quality of the communication and the successful transmission of the information it contains. In doing this, the concept of the Reader (with a capital R) is crucial. If you make false assumptions about the Reader's knowledge, for example, they will struggle to grasp your meaning.
If you use unclear language, or make terminological errors, the Reader will become confused. The same goes for graphical elements such as charts and diagrams: if they are poorly labelled or unexplained, you are not communicating with the Reader as well as you could. Considering the needs of the Reader therefore gives you a way to judge the quality of your own work. It is your job as the author to make the Reader's task as easy as possible. If there are changes you could make to convey your information more clearly, then you should make them.
Often when writing a report, you do not necessarily know who the Reader will be. You cannot therefore make too many assumptions about what they already know. This is the reason why you should spell out abbreviations the first time you use them, for example, and it is also the reason why you should provide references in a standard format. They are there so that the Reader can go to the source material for further details if necessary. You are providing the references as a service to the Reader in case they are needed.