I can't speak for Knute of course, but what I think he meant was: there is no
'package' statement at the top of your classes. So, does the Applet class
know where to find the Box class?
And if that is not what he meant, well, he will let us know.
Meanwhile, you are very close to the solution. What comes next is
from the bottom of my memory, but I think I have it right.
The painting sequence for an Applet (that extends Panel), is as follows:
The method 'update(g)' is called. It clears the panel to the background
This will be done by the system.
then paint(Graphics g) is called, and that is where your method comes in.
Since your panel is already cleared to the background, you do not have to
do that in this method. So, all you have to care about are your boxes.
Now look again at your Box class. You see the method 'display(Graphics g)',
so each box knows how to draw itself, given a Graphics g.
Now, what do you think you need to do in the paint method, given
that you have a list of all your boxes?