The Monster displays considerable emotion—namely anger—when he demands that Frankenstein make him a wife. Although there's something appropriately monstrous about the way he makes his demands—with threats and menace—the motivation behind the Monster's request is recognizably human all the same. Like most human beings, the Monster doesn't want to be alone; he seeks a soulmate, someone with whom he can spend the rest of his life. If this doesn't necessarily make the Monster human, it does make him human-like, so much more than just an animated collection of body parts.
Frankenstein's taken aback by the Monster's demands. He never would've thought in a million years that his diabolical creation would ever have developed anything like an emotional life; that simply wasn't part of his grand vision. The very idea that his Monster wants a mate is simply too horrible to contemplate. The Monster's becoming more human, and that means becoming more independent and more demanding.
It also means that he's principally governed by his emotions, which makes it much more difficult for Frankenstein to control him. It's from this point on that the crazed scientist will start to realize just what a disastrous mistake he made in creating this abomination of nature.
The monster carefully watches the cottagers. In chapter 12, he particularly begins to notice pain:
They were not entirely happy. The young man and his companion often went apart, and appeared to weep. I saw no cause for their unhappiness; but I was deeply affected by it. If such lovely creatures were miserable, it was less strange that I, an imperfect and solitary being, should be wretched. Yet why were these gentle beings unhappy? They possessed a delightful house (for such it was in my eyes) and every luxury; they had a fire to warm them when chill, and delicious viands when hungry; they were dressed in excellent clothes; and, still more, they enjoyed one another's company and speech, interchanging each day looks of affection and kindness. What did their tears imply? Did they really express pain? I was at first unable to solve these questions; but perpetual attention and time explained to me many appearances which were at first enigmatic.
I believe in these words, he is doing both of the actions your question asks.
First, he is showing emotion because he is opening himself throughout these chapters telling Victor his story. He is demonstrating vunerability. He also demonstrates a passion to learn. Here, he expresses confusion, a very real emotion.
Second, he is watching or observing and trying to understand why these people would have any reason for sadness. He begins to learn the signs of emotion by watching it play out in others through actions. For example, he finds tears and has cause to wonder when he sees so much in their lives that could be classified as positive. This passage offers great quotes to demonstrate his humanity.