To find the point on line 1 closest to line 2, the discussion outlines the process for both 2D and 3D scenarios. In 2D, if the lines are parallel, all points are equidistant, while intersecting lines have a clear intersection point. In 3D, the concept of skew lines complicates the situation, requiring the identification of a plane perpendicular to both lines to determine the shortest distance. The shortest distance can be calculated by adjusting one line along the normal vector derived from the distance between the lines. The conversation emphasizes the importance of using parametric vector forms to find the intersection points that represent the closest approach.