The page size is set by the print size you choose in the Page Setup. Every page added in custom package is tied to this size. The point of custom package was to get as many prints onto one page as possible to minimize having loads of different paper sizes stocked. Of course it works for layouts as well. For your example, you'd easily fit the 5X7 and a set of wallet photos on the 2nd page.
That would also work, but since I'm not printing the images myself, each photo size needs to fit the dimensions of the size needed. That way when I upload to the printing company they will already be formatted without me having to manually adjust each photo to make sure nothing gets unexpectently cropped.
The frustrating part is that each page in the custom package exports to a separate JPEG file which is perfect, but since all of the pages are linked to the same page size the 5x7 will export on an 8x10 background.
I Was up til 1 am trying to figure it out. I guess it's a limitation of the program. Maybe a future update would address it but I'm just going to complete the project in a different program for now.
Thank you for your repsonse and insight. awesome for my First post!
No problem George. The way that layout works, it can only use a single page size. You could just create collections using Virtual Copies of the originals, and use the crop tool to get the correct aspect ratio and export those files via Export Presets set up for the correct size and resolution.