Ok I guess I jumped the gun as I figured it out right afterwards. For any future reference, here was my method, which turned out to be very simple.
Pick a photo you want to use as your blur/censor (find a texture online). I just used a black ripple texture image.
Create new pip with that image. I used a default mask just to round the edges. Feathered the mask a bit to round it more.
Set it to just barely transparent.
Unchecked aspect ratio and resized the Pip to be over the area I needed censored.
Pulled the pip image into a new track under my video and aligned it with the times I wanted to blur a part of my video.
Then used keyframes with the motion keyframe to ensure my blurred image was constantly over where I needed to blur.
Once I figured it out it was quite simple. I will need to do this often, so I saved the pip as (roughly) the size I will usually need it. So I will just need to insert it and fix the position with keyframes each time in the future.