1. When you do a backup, does it back up all catalogs or only the current one?
2. I just upgraded to PSE 2023 and want to transfer my existing catalogs into it. I can't find any instructions online for how to do it? Can someone help? I'm clearly a novice at all this. Thanks for your help.
1. The backup tool only works on the current open catalog.
2. There are several ways to do this.
If you only have Elements 2023 installed on your computer, you can search for the catalog database files named with the following convention: catalog.pseXXdb, where XX is the version number in which the catalog was created. So Elements 2020 is actually version 18 of Elements and the catalog database file is named catalog.pse18db. Onee you have located the file, double-click on it and it will automatically be converted to the Elements 2023 format and open up in Elements 2023. Obviously, this will not work if you still have the Elements version that created it installed on your machine. Note that during the conversion process, a copy of the old catalog will be made and the catalog will be renamed with a -1 suffix.
Go to File>Manage Catalogs in the Organizer and hit the Convert button. If you have not moved the old catalog folders from the default location, they will be listed in a box. Otherwise, you will have to navigate to the correct folder for the catalog. Select the catalog to convert and hit the Convert button. Again, a copy of the old catalog will be made and the new catalog will then be available to open in the Elements 2023 Manage Catalogs dialog. See this article for further details.
If you have backups of your old catalogs, use the Elements 2023 File>Restore Catalog to restore them, but use the Original Location for the restore so that the media files are not duplicated on your hard drive. See this article for more information on restoring catalogs.
There is no simple way to 'merge' different catalogs.
That explains why the 'conversion' process suggesed by @Greg_S. is the normal way to go when updating. The catalog structure (the database(s), the catalog contents) is changed more or less for new features. You start with a fully 'converted' catalog and keep a copy of the original one (working automatically with the older PSE version).
Lightroom Classic has superior options and can merge or split different catalogs.