First, congratulations on taking the big first step, and asking the question! No need to feel awkward about it--everyone had to learn sometime. The shame is that we don't seem to feel as a society that this information is necessary enough to require it to be taught in schools. It most certainly is!
You have done a lot of thinking about your situation, but I agree with the others that you should start with some more reading on 401k's in general before deciding on a course of action. What you are asking to do now is not optimal. But it's great that you are looking to take some action!
One thing I would look to particularly address is your fear of losing money on the stock market. Stocks return more over time. That is a fact. Yes, they can lose money for periods of time--they make more money *because* they are at risk. When you are saving for retirement, you are saving for the long term. It is difficult for all of us to think in these timescales, but it is enlightening. The first fact is that the stock market has never lost money for any 20 year period:
https://www.visualcapitalist.com/stock-market-returns-time-periods-1872-2018/This is important because you probably have more than 20 years to go in your career + retirement. (aka the rest of your life)
Not only that, but you need this growth, because inflation will be operating in your life. Even as low as it has been so far this century, inflation is slowly but surely making things cost more.
https://equitable.com/retirement/articles/inflation-and-long-term-investing#:~:text=The%20average%20annual%20rate%20from,rate%20was%202.11%25%20in%202017.
So when you think FDIC-insured options are best, understand this: your insured savings account is guaranteed to *lose* money, after inflation. Stocks will almost certainly beat inflation, which is why they are an important and common tool in retirement planning: owning stocks means you need to save less in order to have enough money to retire. (Or to accomplish any long-term goal, really) If you need the security of sure things to sleep at night, that is OK to realize. But it means you have a heck of a lot more saving to do. Pick your poison.
It is possible, though! The hard part is not picking your investments--it is sticking to the discipline to continue saving, and watch your spending theough your life. Good luck on your investigation, and keep asking questions!