How can we directly add half cell potentials to measure the EMF of a galvanic cell? We know that $E^\circ_{\text{cell}}=E^\circ_{\text{reduction at cathode}}+E^\circ_{\text{oxidation at anode}}$. For example, in a cell $\ce{Zn(s) | Zn^2+(aq) || Cu^2+(aq) | Cu(s)}$, $$E^\circ_{\text{cell}}=E^\circ_{\text{reduction at cathode}}+E^\circ_{\text{oxidation at anode}}=E^\circ_{\ce{Cu^2+/Cu}}+E^\circ_{\ce{Zn/Zn^2+}}$$

This makes sense to me. I think of $E^\circ_{\text{cell}}$ as the $E^\circ$ value of the net cell reaction i.e. of $\ce{Zn(s) + Cu^2+(aq) -&gt; Zn^2+(aq) + Cu(s)}$.

But, consider this cell: $\ce{Zn(s) | Zn^2+(aq) || Ag^+(aq) | Ag(s)}$ According to my textbook, the $E^\circ_{\text{cell}}$ value here is again defined by:

$$E^\circ_{\text{cell}}=E^\circ_{\text{reduction at cathode}}+E^\circ_{\text{oxidation at anode}}=E^\circ_{\ce{Ag+/Ag}}+E^\circ_{\ce{Zn/Zn^2+}}$$

But, I think this is not correct.
Consider the fact that this cell is made up of two half cell reactions:

$$
\begin{array}{}
\text{Oxidation}&amp;\ce{Zn(s)}&amp;\ce{-&gt; Zn^2+(aq) + 2e-}&amp;E_1^\circ\\
\text{Reduction}&amp;\ce{Ag^+(aq) + e-}&amp;\ce{-&gt; Ag(s)}&amp;E_2^\circ\\
\text{Net cell reaction}&amp;\ce{Zn(s) + 2Ag^+(aq)}&amp;\ce{-&gt; Zn^2+(aq) + 2Ag(s)}&amp;E_3^\circ\\
\end{array}
$$

and that we can't add $E^\circ$ values directly, since they are an intensive property. Instead, we need to say that $\Delta G_3=\Delta G_1+\Delta G_2$ and then write $2E_3^\circ=2E_1^\circ+E_2^\circ$ or $E_3^\circ=\frac{2E_1^\circ+E_2^\circ}2$, which is definitely $\neq E_1^\circ+E_2^\circ$, as my textbook says.

I believe I have correctly presented everything here, and cannot figure out my mistake. Where am I wrong?
You are writing $\Delta G_3=\Delta G_1+\Delta G_2$. But it should be $\Delta G_3=\Delta G_1+2\Delta G_2$ (I am considering  $\Delta G_2$ as free energy change for the conversion of $\ce{Ag+}$ to $\ce{Ag}$, which is considered 2 times in the final reaction) Because $\Delta G$ also depends on the number of moles of reactants and products, if you add two times the second reaction, the $\Delta G$ will also be used as twice its value. There you've made a mistake.

Thus the equation will be $$2E_3^0 = 2E_2^0 + 2E_1^0$$ So you will have $E_3 ^0 = E_1^0 + E_2^0$.