I finally discovered that composite is not a transition but an effect(?). I would have expected 'transition' to be the morphing from/to another.

I try to overlay video Top-Foreground (parts of which I want to be transparent) on video Bottom-Background (which is larger). Once the two are aligned in the assembly window I select effect Effect>Alfa>Mask0Mate and mark perimeter areas of the top video to be transparent, then for the areas farther inside the top video that I want to be transparent I apply Effect >Alpha>Bluescreen. Sofar this works out perfectly.

What I can NOT accomplish is

- force the result video to be the same size (say 1920x1200) as the background video
so that a foreground video of say 500x700 would occupy only that much of the background

- end up with both video components remaining proportional as they were in the originals,
instead of one or the other becoming elongated

- move the non-transparent remainder of the smaller top video wherever I want over
and within the larger background video. The background is already much larger but
I also want to keep the more interesting part of it visible.

I found part of the answer in the Effects<CropScalePosition dialogue where two input boxes labelled Tilt-X and Tilt-Y stand for Slew/Slide/Move/Migrate. Input in these will move the foreground image (right off he screen if desired). I had not before tried them thinking that the last thing I wanted was to 'tilt' anything. The resizing input boxes are in the same dialogue, called Scale-X and Scale-Y, I had tried one before but since there is no coupled scaling I ended up with elongation so I just boltered rigt outa there (been spoiled by gimp for too long).

So to resume for the benefit of anyone doing a search:

- CntrlAltClick to select BOTH videos and then AddTransition>Composite and pull to desired length
(the foreground video being on TOP). I don't know, I think I would label this AddTopVideo as Overlay on BottomVideo

- Chop the extra periphery to transparency with Effets>AlphaManipulation>Mask0Mate

- make internal areas transparent with Effects.AlphaManipulation>BlueScreen

- Slew the foreground video with Effect>CropAndTransform>CropScaleAndPosition "Tilt-X" & "Tilt-Y" UFN
This is a misleading label

- Scale the foreround video with Effect>CropAndTransform>CropScaleAndPosition> Scale-X & Scale-Y

Just some minor usability notes you might hopefully helpful: you don't necessarily need to select both clips (by the way, CTRL is sufficient, no need for ALT), just click on the topmost clip. Then add the transition to the topmost clip.

Or simply drag the transition from the transitions box directly on the topmost clip without needing to select it first. Depending on your screen size the drag method might be more convenient in case you can leave the transition box open all time. No need for fiddling with right clicks and going into sub menus.

In case you don't need to crop but ony translate/rotate, then the affine transition often is very helpful. Alternatively, cairoaffine offers slightly more features. The affine transition also has finer translation control compared to the crop, scale, pan effect. The latter can only move on a 1/100 of the frame width/height. The affine transition works on pixel basis. Sometimes it absolutely makes sense to combine the crop, scale, pan efffect with the affine translation for more precise pan.