Laura wrote:
I noticed
that the overhang from top level over lower level is not well sealed. There
is only a vinyl soffit piece blocking air/heat flow. Should I block this
area with additional insulation?

Yep. Make sure that water can never reach the insulation. Board it up
if you think it has half of a chance to get wet. Really, blocks of the
same material as your floor joists would be best to block that area.
That would make the floor / ceiling stronger, key word, bridging.

Tom in KY.