1. The other two pictures are shown in the "encounter" event, when range is less than "close-up" (to see what I mean, make an encounter event, enable one button to "decrease range" and set starting distance to "far away".
2. You are doing nothing wrong, that is the way the program is supposed to function. What it means is that sprites are okay for pictures of monsters (or even other things if you only want them to appear in the one square). If you want to have a chest just sitting on the floor, you need to make it a "wall" so that you can see it before you get to it.
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