Yes, this can be confusing.
With a virtual router routing-instance you are creating an separate and independent routing table and set of interfaces on the device. Thus you can have overlapping addresses because they are in different routing tables.
You create the interfaces and assign them to the VR in the same step. You could also reuse the VRRP settings because these are only significant within the same layer 2 network.
set interfaces vlan unit 1902 family inet address 172.23.164.253/23 vrrp-group 192 virtual-address 172.23.164.1 set vlans DRTEST_VLAN vlan-id 1902 set vlans DRTEST_VLAN l3-interface vlan.1902 set routing-instances DRTEST instance-type virtual-router set routing-instances DRTEST interface vlan.1902
Now because you have two switches that need to communicate. You will also need to add this VLAN to the port that connects these two switches. So simply add the new sub-interface on the trunk port and add this sub-interface also to the DRTEST routing instance too. This will be how the two VR see each other for the VRRP connection.
Then to build out your test site you then start adding your necessary access ports to the VR and VLAN as needed for your tests.