Clarification on Javascript Execution Context

I've been attempting to solidify my understanding of JS's execution contexts, and am having trouble getting an explanation as to why the code below does not print out "hello world".

var foo = "foo";

function test1() {
    console.log(foo)
    var bar = "hello world";
    test2();
}

function test2() {
    console.log(bar);
}

test1();

It is my (admittedly very shaky) understanding that test2(), being executed inside of test1(), has access to test1()'s execution context and should be able to resolve the variable name bar by moving up the scope chain into test1()'s execution context where bar is defined. Instead, I get a reference error when attempting to print bar.

I can understand how the code below works due to JS's lexical scoping, but I would appreciate an explanation how JS interprets each differently in terms of execution contexts and scope-chains.

function test1() {
    console.log(foo)
    var bar = "hello world";
    function test2() {
        console.log(bar);
    }
    test2();
}

test1();

So far, my best attempt at finding an explanation myself was by modifying the first code block like so:

var foo = "foo";
var bar = "not hello world :("

function test1() {
    console.log(foo)
    var bar = "hello world";
    test2();
}

function test2() {
    console.log(bar);
}

test1();

Here, the call to test2() prints out "not hello world :(" defined in the global scope. My first thought was that test2() was going up the scope chain to test1's execution context, to the global execution context, but that doesn't seem right, as it would have found a definition for bar inside of test1() before reaching the global definition. Thus, my second guess is that the definition of test2() is creating a "closure"-like capture of the global execution context when it was defined, and calling it within test1() produces a value for bar of null/undefined since that was its value at function definition (having no declaration at all to be hoisted). Thus, it does not move up into test1()'s execution context to search for the identifier.

Any explanations/resources would be tremendously helpful. I am obviously very new to the language, so apologies if my vocabulary/terminology isn't quite correct. Thanks in advance for your help.