How to make the rest of the mask transparent in Premier Pro CS6?
Ok, now that I was able to reproduce your technique thus far, I can fill in the missing pieces.  Your use of the Track Matte Key produces a layer that is transparent everywhere other than where the mask is present.  You need to layer it overtop of the video that you want behind it and you need to apply the dimming effect to the background layer.

In your example, Move video 2 to Video 3 and copy Video 1 to Video 2.  Leave the track matte key on Video 2 and remove it from Video 1.  This will layer the highlighted area (Video 2) over the full video (Video 1).  You can then either reduce the opacity or apply a brightness reduction to Video 1 to make it appear more subdued and get the look you are going for.