In this work, a dual-frequency ultrasonic field was employed to improve the quality and mechanical properties of magnesium alloy ZW61 ingot. The effect of the spatial position of the sound source on the cavitation volume, microstructure size, and morphology was discussed in detail combined with numerical simulations and experiments. The mechanical properties were analyzed elaborately and the relationship between yield strength (YS), ultimate tensile strength (UTS), and average grain size (d) was established. The results showed that the dual-frequency ultrasonic field (DUF) had a larger cavitation range and superior grain refinement ability than the single-frequency ultrasonic field (SUF) at the same energy consumption, with the grain refining from 578 μm (untreated) and 395–433 μm (SUF) to 55.2 μm. The grain refining effect of DUF weakened with increasing sound source spacing, with d increasing from 55.2 μm to 163 μm. The radiating angle had little effect on the grain size. Too shallow or too deep inserting depth of the ultrasonic rods could seriously weaken the grain refinement. In this case, 30 mm source spacing, 60° radiating angle, and 30 mm inserting depth were the optimal process parameter combinations, and the ingot strength was increased from YS of 83 MPa and UTS of 151 MPa to 138 MPa and 241 MPa, respectively. YS and d for all conditions conformed to the Hall-Petch relationship, with σ0 and k values of 71.3 MPa and 503.9 MPa μm−1/2. The relationship between UTS and d could be expressed as UTS = 126.7 + 907.0 d−1/2.