I am unable to see the light color palette so that I can copy and edit it although I have set it as my default (same problem when it is not default).
Is there something I am doing wrong here?
If you click on the + New button in your screenshot you’ll get something like this.
You can then select a base for your new palette. If you select Light, you’ll get a new color palette with the same colors used in the light palette.
From there, you can edit any or all the colors. Once you’re done, give your palette a name and save it. Then head to your theme and set it to the newly created palette.
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