Hello [name]! Thanks for joining the GMC. Before making any posts in the Tech Support forum, can we suggest you read the forum rules? These are simple guidelines that we ask you to follow so that you can get the best help possible for your issue.
Click the "Edit Image" button and it will open the sprite editor and let you edit the image.
If you want to change the size of sprite click the little icon with 4 arrows on it next to where it shows the current size of the sprite (16x16), and add frames using the big + button.
Just want to say thinks, there were a few other things that were confusing me and Im slowly coming around to GM2. I think I was just getting frustrated with the interface quickly, there was more than just not finding the edit but Im getting it.