can I add an audio video clip to be viewed as a PIP or displayed in a small square within the movie?

You should be able to insert and audio/video clip by using the PiP feature in the normal way. Here's a help menu link that explains how it works:

https://help.apple.com/imovie/mac/10.1/#/mova1aaa682b

-- Rich

Not sure if I understand you correctly. Do you mean that you want a picture of the audio clip, that contains no video, to be viewed as a PiP clip while it is playing? So, it would look like this?

You can do that with a little fiddling. Play your audio clip in the timeline and take a screen recording of it using controls at the bottom of your screen that will appear when you press the Command-Shift-5 keys on your keyboard. That will give you a .mov file screen recording clip on your desktop that looks like this.

Then you can import that screen recording into your movie project and insert it as a PiP. The audio sound will play and the play head will be seen moving across the clip, as in my first screen shot above.

-- Rich