Ionic liquids (ILs) are promising designer solvents for multivalent electrolytes, enabling the modulation of molecular-level interactions of solvate species. The molecular mechanism of multivalent-ion clustering and its impact on electrolytes properties is far less studied than that of ion pairs. Herein, we explore the effect of ion clusters on the transport and electrochemical behavior of IL-based electrolytes for Mg batteries. Simulation and small-angle X-ray scattering results indicate that ILs with higher denticity effectively suppress ion agglomeration and parasitic reactions of the Mg electrolytes. Although ion clustering reduces the diffusivity of Mg2+, the Coulombic efficiency for the reversible Mg deposition/stripping process is improved, highlighting the importance of microstructural and dynamical heterogeneities in the rational design of enhanced multivalent electrolytes.