Spatially resolved spectroscopic observations show wing enhancements and broadening in extreme ultraviolet emission from particular hot iron lines. Several physical processes ranging from plasma turbulence, magnetic perturbations to non-Gaussian ion populations, and non-thermal physics have been proposed to play a role in their formation. In this thesis I investigate in detail the role of plasma dynamics in spectral line shapes by studying the wing enhancements of Fe XXIII and XXIV observed during solar flares, using a field-aligned hydrodynamic model. First I examine how plasma dynamics in a single, monolithic flaring loop contributes to the formation of line asymmetry. This is done by running 35 simulations that use the observed values and their uncertainties for the driving electron beam parameters. Next I study the effect of flaring loop length on spectral line shape and broadening by running simulations with different loop lengths and the same beam parameters. The presence of sub-resolution structures, confirmed by increasingly high-resolution observations, and observational difficulties in isolating a monolithic loop from nearby loops, necessitate an investigation into the effect of superposed dynamics on some line asymmetries. Hence, I design multiloop models that are representative of three possible configurations of loops. Here I study how the resultant Fe XXIII spectral line profiles differ in each case and examine the differences between these multiloop models and the single loop model. I also briefly explore the role of a constant time delay in heating successive sub-loops of a multiloop configuration on the spectral line shape. The results show that the single loop model can successfully reproduces line asymmetries, and the loop length plays an important role in explaining some of the key observations such as the positive correlation between Doppler shifts and line widths, and broad but symmetric hot Fe lines. For a multiloop model with sub-loops of the same length, an imposed heating time delay is an important factor that significantly alters the line profile shape from the single loop case. Whereas, multiloop models with sub-loops of varied lengths predict significantly different line profiles, such as asymmetric lines for longer durations and with large blue-shifts, without the necessity of introducing time delays.