What is the difference between Trailer and Movie when creating a new one in iMovie? The problem is as it is on the image below?
The Trailers methodology was designed for brief (~1 minute) movies, and it provides lots of pre-designed visual and audio templates (background music, essentially) to help make the process simpler.

These links may help: How to create iMovie 10 trailers, Apple's convert trailers to movies, and How to Create a Movie Trailer in iMovie.