I’m afraid it’s just that “Headers” here just doesn’t mean quite what you’re guessing. The fields you’re looking at there are the HTTP request fields that will be sent off to Obsidian, and they have meanings that are clear for folks who are used to making HTTP requests, but probably not for anybody else – it’s really not that complicated, though. In this particular case, the Headers field is for setting HTTP headers when interacting with the API. What headers are valid there depends on what exactly you’re trying to do, but they are particularly useful for the PATCH method you mentioned. If you want to add a heading, just add it to the “Content” section as normal Markdown.
Regarding PATCH – it is used for inserting content in places other than the end of your file; you can find documentation about how to use it here (once github is back up again): Local Rest API for Obsidian: Interactive API Documentation. If you wanted to use this tool such that it inserts your content after an existing heading named “Reading Log” (but before whatever heading follows it), you could type the value Heading: Reading Log into that “Headers” field.