How can I change the color of the background?

Another method is to place the video on both video track 1 and 2.

Increase the scale of the video on track 1 so it becomes blurry and covers the black area.

It will be seen where the black used to be.

You could also place a background image on video track 1 and your video on video track 2.

Here is one site that has free ones to download:

https://www.pexels.com/search/cool%20backgrounds/

Place a color matte on video track 1 and your video on video track 2.

Create a colored matte for a background

You can create a clip consisting of a full‑frame matte of solid color, which you can use as a solid background for titles or animated clips.

Note: 

Brightly colored mattes can serve as temporary backgrounds to help you see transparency more clearly while you adjust a key effect.

1. Click Project Assets.
2. In the Project Assets panel, click New Item from the panel options and choose Color Matte.
3. Choose a color in the Adobe Color Picker dialog box, and click OK.

A color matte clip is placed into both the Project Assets panel and the Expert view timeline.

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from here:

https://helpx.adobe.com/premiere-elements/using/creating-specialty-clips.html