Both of these cards are red challenge cards, and once you beat the challenge, the reward is that you immediately fight High Lord Margath, cannot escape, and gain a +4 on your first roll of combat. My question is that if you immediately fight Margath, is this considered a new turn for purposes of the "Activate-to-Use" items? This recently arose in a game where a player faced the Skeleton of Margath, and pulled out all stops, including exhausting some activate-to-use items, to defeat it. When the card instructed him to fight Margath, we agreed that he could not use any activate-to-use items that were used to defeat the Skeleton of Margath when fighting High Lord Margath. He was ultimately knocked out fighting Margath. Is this an accurate interpretation? Thanks for your help!

I would be inclined to agree with your interpretation. The hero doesn't get a new turn, they just have to resolve a second challenge in the same turn. The refresh cards step is not repeated, just like movement is not repeated.

Really, the player knew he would be fighting Margath next (nothing about the card is hidden from the player.) If he didn't read it, that's his fault. If he did read it and still pulled out all the stops on the Skeleton, then he really has no excuse.