Acredito que você colocou a quinta linha do file1
muito cedo no seu exemplo.
Se eu tiver razão, tente este snippet:
awk '(NR+1)%2{print $0;getline<"file2";n=split($0,a,", ");if(n>1)for(i in a)print a[i];next}1' file1
saída:
A Partridge in a Pear Tree
Two Turtle Doves
I was born
the red planet
I am hungry
on Mars
Three French Hens
Four Calling Birds
I love frogs
they are so tasty
with gold sun
red ketchup
Five Gold Rings
Six Geese a-Laying
Seven Swans a-Swimming
Eight Maids a-Milking
Nine Ladies Dancing
Ten Lords a-Leaping
Eleven Pipers Piping
Twelve Drummers Drumming