That won't work, as you noticed. Records you fetched are database records so - once you update their values and commit, you overwrite data.
If you want to insert new records, then
- add them into new rows - you can do that manually (by typing those values), or
- you can duplicate one of previous records into a new record (use Forms menu for that or a shortcut key; look for "duplicate record" option) and modify that duplicated record.
Alternatively, don't use data block but control block (the one that isn't based on a database table). Populate it, somehow (e.g. you could create a button which calls the procedure; it uses a loop and populates record-by-record). Modify values you want and create your own procedure which will insert new rows into the database table. As of the primary key, it depends on how you do it; if it is a database trigger which uses a sequence, it (the trigger) will do the job. Otherwise, you'll have to create a primary key yourself (during the insert process).