What does he mean when he says things will "rearrange" itself???

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He is saying that there would be net movement of particles in the direction of a net pressure until the fluids arranged themselves so there was no longer a net pressure in either direction (think Newton's 2nd law).  At this time, at the same elevation of the fluid the pressure would be the same everywhere in the fluid, even if you were talking about elevations in different columns of the fluid.  The fluids have to be connected for this to be true.  His example is the hydraulic pump with a small diameter column and a large one.  This machine lets you raise a large weight with a small one.  The mechanical advantage is the large area divided by the small area.  SeeP1 = P2 at the same location according to Pascal.Thats (F1 / A1) = (F2 / A2)If F2 is the applied force then F2 = (A2 / A1)*F1If A2 > A1 you see you can lift F1 with a smaller F1 force because A2 / A1 is >  than 1.