Yes, galley formats are the formats presented to the readers, e.g. PDF and HTML. The Layout Version is the source document that is used to create the PDF, HTML, etc, and is generally to be used when there are separate editorial roles that need to be coordinated (such as a separate layout editor).
Are you trying to upload a galley as Section Editor? The Section Editor should always be able to upload a galley format. Layout Editors, however, can only upload galleys once they've been requested to do so. (If you're performing multiple editorial roles, I'd suggest doing so as Editor rather than by enrolling in the additional editing roles.)
Open Journal Systems Team