Would it be ethical of a student for him/her to act as a proofreader/editor for other students' essays and homework? I'll be simple and direct, since the situation I'm asking after is pretty general, and hardly requires an anecdotal context.

Would it be ethical of a student for him/her to act as a proofreader/editor for other students' essays and works?

For example, students unfamiliar with English seek out this student for proofreading - this student corrects all the grammar and spelling errors in their papers, and fixes cases of terrible vocabulary (e.g. using "mail" instead of "male," or replacing instances of "spinning plane" with "helicopter" when it is clearly meant to be so).

And to further push the boundaries, this student gives critiques and advice of sorts. If Paragraph A doesn't make sense, they will advise them to rewrite it. If Paragraph B fits better as a conclusion, they will advise them to move it. If the essay suddenly dives into ill-fitting rambling for a page or two or goes off-topic, they will advise them to cut it.

Is this ethical?
As an student instructor, I would consider it ethical if certain conditions are met:


The proofreader isn't taking unfair advantage of the student, especially when paid for his services.  There are plenty who call themselves 'tutors' who will use dishonest tactics; for instance, deliberately being unclear as to his editing methods in order to encourage continuing dependence on his services, making false criticisms of edits the student's friend made for free, or emotionally manipulating students who are from abroad.
The student isn't taking unfair advantage of the instructor.  It's important that the student respects classroom policy on external assistance and observes the relevant boundaries when working with his editor.
The editor isn't taking unfair advantage of the instructor.  It's not clear from your question whether the editor is in the same course as the writer, or merely at the same school.  If the editor is enrolled in the same course, I'd consider it unethical for him to read through other students' work before his own is handed in.
The instructor isn't taking unfair advantage of the editor.  There should be reasonable office hours to work with students, because that work is the responsibility of the instructor, not the classmates.