Just like in a manual car transmission, neutral is any position where a gear isn’t selected. There’s a neutral position between every gear.
While there’s a bunch of neutral positions, the neutral between 1st and 2nd has a detent that creates a “click”, making it easy to find.
You use neutral when stopped. Taking off from a stop you use 1st gear to get rolling, so of course it’s positioned next to first. While they could have added a neutral below 1st, that means that you run the risk of downshifting to N, while putting it “between” gears means you have to intentionally search for it..
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