This part of the stem is loose. What do I need to do to tighten it down?

That’s the upper bearing cup, which normally is such a tight fit into the head tube that it needs a tool – called a headset press – to install it. That’s what you’d need to fix it.

However, it’s very rare for these to come loose unless either the cup or the head tube itself is damaged. If the cup is bent or distorted, you’ll need a new one (probably a new headset with all new parts). That’s a pain but not the end of the world. If the head tube has become distorted and out-of-round, your frame is dead.