Iphone Vertical video with static background images/video

I am new to resolve and trying to edit a series of vertically shot iPhone videos into a video. I would like to fill the black bars on the side of the Iphone video frame. My solution was to insert a photo/video on a lower video track, then using fusion apply a blur to the background photo/video and have the main Iphone video playing on top.
However, my problem is, the video will only play over the background image if I have the transform settings for the iPhone video set at .999 or less. It will not play over the image if it is set to 1.0 or larger. I could probably live with the .999 or less setting, but if their are sections of the Iphone video that I would like to zoom on or make the video larger than the standard vertical screen size, the background image goes black and i revert to the standard vertical video with black bars on both sides.
Thanks for any guidance you can provide.
However, my problem is, the video will only play over the background image if I have the transform settings for the iPhone video set at .999 or less. It will not play over the image if it is set to 1.0 or larger. I could probably live with the .999 or less setting, but if their are sections of the Iphone video that I would like to zoom on or make the video larger than the standard vertical screen size, the background image goes black and i revert to the standard vertical video with black bars on both sides.
Thanks for any guidance you can provide.