When I said in my post: "That’s right! Even if the buyer paid you via PayPal with a business PayPal payment, or if you went to that “crate your own label” page, you can only produce either INTERNATIONAL FIRST CLASS LETTER or INTERNATIONAL FIRST CLASS LARGE ENVELOPE postage labels.", I meant that you could not produce first class parcel mail, but could produce first class letter and first class large envelope mail, as well as higher/more expensive grades of mail like Priority Mail packages, etc.
Robert