As described above. Higher tracks take precedence over lower. So, for track 1 to be seen, the track two image must be smaller.
Use the Picture-In-Picture effect, or the Motion effect to size and position track 2 content.
The close-up video can be dragged left or right to sync it with track 1. If you make a mistake, press <ctrl-Z> (EDIT|UNDO) to go back, step-by-step.
Save Project File AS routinely, giving it a unique # or name, so as not to overwrite prior saves. Using Save Project Files (no AS) will overwrite. From the HOME tab, that choice is available by clicking the caret to the right of the Save Project button on the toolbar.