One of the goals of this course is to teach abstraction. Think about the progression of the chips you have designed so far. In most cases the chip you just designed is used in the next chip.

Simple gates used to make Mux ... Mux used to make Mux16 ...

You can make Mux4Way16 with 3 Mux16 parts. Then you can use Mux16 and Mux4Way16 parts to make Mux8Way16.

The first Mux16 selects between 'a' and 'b'. Which sel bit in the truth table changes between 'a' and 'b' being selected?
The second Mux16 selects between 'c' and 'd'. Which sel bit in the truth table changes between 'c' and 'd' being selected?
The third Mux16 selects between a/b and c/d groups.

What you are missing is that hardware bits are numbered from right to left. When sel = 01, sel[0] is 1 and sel[1] is 0.

This order will make more sense in chapter 2 where you will learn about binary numbers. When a number is on a bus, bit[N] is the 2^N weighted bit of the number.

Just sending my thanks to Mark for elaborating that the bits from the 2-bit sel bus should be treated independently. I was finally able to implement this gate because of this insight.