Spacecraft formation flying (SFF) offers robust observations of multi-scale ionospheric space weather. A number of hardware-in-the-loop (HIL) SFF simulation testbeds based on Global-Navigation-Satellite-Systems (GNSS) have been developed to support GNSS-based SFF mission design, however, none of these testbeds has been directly applied to ionospheric space weather studies. The Virginia Tech Formation Flying Testbed (VTFFTB), a GNSS-based HIL simulation testbed, has been developed in this work to simulate closed-loop real-time low Earth orbit (LEO) SFF scenarios. The final VTFFTB infrastructure consists of three GNSS hardware signal simulators, three multi-constellation multi-band GNSS receivers, three navigation and control systems, an STK visualization system, and an ionospheric remote sensing system. A fleet of LEO satellites, each carrying a spaceborne GNSS receiver for navigation and ionospheric measurements, is simulated in scenarios with ionospheric impacts on the GPS and Galileo constellations. Space-based total electron density (TEC) and GNSS scintillation index S4 are measured by the LEO GNSS receivers in simulated scenarios. Four stages of work were accomplished to (i) build the VTFFTB with a global ionospheric modeling capability, and (ii) apply the VTFFTB to incubate future ionospheric measurement techniques. In stage 1, a differential-TEC method was developed to use space-based TEC measurements from a pair of LEO satellites to determine localized electron density (Ne). In stage 2, the GPS-based VTFFTB was extended to a multi-constellation version by adding the Galileo. Compared to using the GPS constellation only, using both GPS and Galileo constellations can improve ionospheric measurement quality (accuracy, precision, and availability) and relative navigation performance. Sensitivity studies found that Ne retrieval characteristics are correlated with LEO formation orbit, the particular GNSS receivers and constellation being used, as well as GNSS carrier-to-noise density C/N0. In stage 3, the VTFFTB for dual-satellite scenarios was further extended into a 3-satellite version, and then implemented to develop a polar orbit scenario with more fuel-efficient natural motion. In stage 4, a global 4-dimensioanl ionospheric model (TIE-CGM) was incorporated into the VTFFTB to significantly improve the modelling fidelity of multi-scale ionospheric space weather. Equatorial and polar space weather structures (e.g. plasma bubbles, tongues-of-ionization) were successfully simulated in 4-dimensional ionospheric scenarios on the enhanced VTFFTB. The dissertation has demonstrated the VTFFTB is a versatile GNSS-based SFF mission incubator to study ionospheric space weather impacts and develop next-generation multi-scale ionospheric observation missions.