Yes, they do the alterations on board the Magic. Both my DS12 and myself had to have alterations on each of our tuxedos. My pants were too short, and his sleeves were too long. A very nice gentleman came to the room, re-measured us, left with the tuxedos, and when we returned from dinner that night they were hanging in the room.
A Tip - try them on AS SOON AS YOUR STATEROOM ATTENDANT BRINGS THEM!!! I'm sure the "tailor" can get busy as formal night approaches.