What is in /content/closed.smil?
The Scheduler's schedule.smil is run when Wowza starts. Use the schedule.smil file that is in the example, modify that to your needs.
The stream that you playback, referring to the schedule.smil that is included in the package, is "Stream1" (and "Stream2")
You can playback in Wowza example LiveVideoStreaming player:
If any of the Playlist items contain MediaCaster streams, as yours will, you have to start those streams using the .stream file names in /conf/StartUpStreams.xml for this to work. Those sources should be available when Wowza starts, though Wowza will keep trying to connect if any are not indefinitely. You do not have to do anything with schedule.smil itself in StartUpStreams.xml, it is just parsed by Wowza on server start to start the streams you define.
For testing, adjust the schedule so the first Playlist you play is scheduled in the past so it starts right away. You can schedule the ad for the near future for testing.