Its a literal expression. It basically means that people who "fit in" have no problems at all when it comes to socializing because they're very popular among others. There's no friction when they're "inserting" them slves into society. Like a piece of a puzzle ,or, if youre familiar with video games, a piece in Tetris which fit into the whole very smoothly.

It means "They seem to belong there". I see that you like Taylor Swift!

thank you Candice ^_^

To"fit in" means to be able to socialize with your peers comfortably. Kids who "fit in" at school are considered the "cool kids" because everyone wants to be like them.