Read other answers that told me to just add a second layer through tools> Add 2nd Layer. I've done so but I can't see how to actually add the textures for that layer. Also am I supposed to be sizing up and offsetting the second layer (hats/jackets/sleeves) if I want it to show up? My lower layer shows up just fine but I can't even figure out how to edit the 2nd layer I've added, let alone how to give it the correct textures.

You have to edit the newly created cubes to match your texture sheet.

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