Moving mouse to 2nd monitor selects/focuses on app on second monitor

There is no trigger in Keyboard Maestro that will do this. I think the only way would be to have a Macro that is constantly monitoring the mouse position in a kind of loop. This might be a starting point:

But if you do manage to achieve your aim I think you might find it a bit annoying, if every time the mouse moves to the second monitor a particular App is activated. You would need to have a way to enable or disable the behaviour which introduces more things to remember...