I would like to delineate the edge of my extraction below, not by hand, just automatically. I want to eliminate the inside polygons and keep the outermost edge only (highlighted by blue, not accurately). Could anyone give me some hints on this part? Thank you in advance!
You'll probably need to manually fill the holes inside or else it's always going to consider those part of the feature when you run Dissolve.
If you wanted to do it semi-manually, you can start editing and trace the boundary you want.
Also, you posted in the area for help using the GeoNet site. Tagging https://community.esri.com/community/gis/managing-data?sr=search&searchId=c25d959d-9dd7-4320-a287-94... for better visibility.
Ah, you can try Union-ing your existing file with another feature class containing a polygon that covers your entire area, then selecting and deleting the resulting "outside" polygon, and dissolving the "inside" polygons.