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you can set up overlays on a per core basis by adding the overlay configuration to:

you can set up overlays on a per-game basis by adding the overlay configuration to
/home/pi/RetroPie/roms/SYSTEMNAME/gamename.zip.cfg (not all systems used zipped game files, but you get the idea)

the actual overlay configuration would depend on your overlay image, location, resolution, etc.

In regards to objective 2 I understand that MAME4ALL is likely the most reliable source of ROMS on retro pie (I had previous problems getting Mame Roms to work at all). With this in mind I believe those overlays in objective 2 have been created to use Retroarch (Liberto not Mame4all). Is there a way to get them working with Mame4all?

the link objective 2 already has the config files needed included in the zip, but they’re likely for current libretro mame, not the older version we use (lr-mame2003). i imagine the config would be the same but something to consider…

also, i don’t agree mame4all is the most reliable (limited rom set), although it is good if you only have a pi1, i suppose. if you want to use overlays you will need to use the libretro version of it (lr-imame4all), in any case. the other version of mame4all is not libretro and and does not support overlays.