Your vertical force balance on M1 is correct if "a" in your equation is the vertical acceleration a
y1. Your vertical force balance on M2 is incorrect. It should read: ##N_{table}-F_{FR}-M_2g=0##. Can you see that from the free body diagram?
In terms of the normal contact force between the two bodies (of magnitude F
N), you can see that F
N is drawn with opposite directions in the two free body diagrams, indicating that Newton's 3rd law applies. This is equivalent to your equation F
N M1= -F
N M2. So, F
N in the free body diagram for M1 is the contact force exerted by M2 on M1, and F
N in the free body diagram for M2 is the contact force exerted by M1 on M2.
I'm uncertain if that would be the minimum contact force requires for M1 not to fall, or if there's a different way I should look at it.
That is not the minimum contact force required for M1 not to fall. Your vertical force balance on M1, although correct as it stands, needs to be developed further, by taking into account the relationship between the normal contact force F
N and the vertical friction force F
FR for the situation in which M1 is just about to slip (i.e., fall). This relationship involves the coefficient of static friction. What is this relationship? If you substitute this relationship into you vertical force balance for M1, what do you obtain? But, you're not through yet.
The question doesn't ask for the minimum contact force required for M1 not to fall. The question asks you what is the minimum value of the
applied force Fa required for M1 not to fall. That will be different than the contact force between M1 and M2. You will not be able to answer any of these questions until you start by writing down a force balance on M1 in the horizontal direction. So let's see what you come up with for that. ( After you get that correct, there will still be more work to be done.)
Chet