When on Imports a Still Image, and drags it to the Timeline, PrPro has essentially converted that to Video, which will be physically Video, when Exported. This is why, when you drag the Still Image to the Timeline, a red line appears above it - that means that for smoothest playback, as Video, one needs to Render that part of the Timeline.
Now, that "arrow" can certainly be above either a Still Image (perhaps the Background Layer of your Layered PSD), or above Video, and can be animated to move, over time, with the Fixed Effect>Motion>Position, and Keyframed over time.
Did you Import your Layered PSD as a Sequence (Layers are retained), or as Footage (Layers are Flattened)?
With Import as a Sequence, each Layer will appear as a discrete Clip, and those can be added to another Sequence, and then can be animated independently, as needed.