In iMovie is there a way to have the background have key frames and motion (similar to picture in picture)

Open the video file in Quicktime player and then go edit > Trim or command + T and you can trim the video in the editor.

Save the video and you're good to go.

Try importing a movie from a DVD. If you do, that will give your video options just enough complexity, apparently, to cause imovie to give you a choice; the left navigation should show that importation event along side of your iphoto movies. This happened to me at least. As soon as I imported from other sources, it no longer kept my ENTIRE iphoto library as the default. In reading what I just wrote, I'm now confused: I'm pretty sure that I put my DVD video through iPhoto first, so, I'm not sure exactly what I did in imovie to make the importation event unique, but in any case, once I did that, I wound up seeing a directory structure where my iphotos videos were no longer the default selected.

Of course, in order to use any of those videos, I now have to click on iPhoto movies in which case I'm back to waiting for the all to load, which still takes a long time.