Colin beat me to the answers...I would add that you will need to tick the playback option to play tracks whilst recording a new one. This can be found by going to edit then click preferences then click recording then tick the box.

You can mute any tracks you do not want to hear whilst recording.

It is better to record a few takes of each track and use the best ones in the final mix. Tracks or sections of tracks can be edited together to form a final mix. Just drag the cursor over the piece you want to use and then copy and paste it into another empty track. There are a few useful FREE Audacity tutorials that are worth looking at. Just google Audacity tutrials.