Can you bring back the outpoint slightly on the first song, butt the beginning of song two up to the end of song one, then add an audio fade into the second? I have not worked with Premiere Elements, but that method should work fine if it gives you basic tools.
You might be able to drop the second song into the sequence so it slightly clips off the end of song one, then add your fade. Different way to possibly get the same result.
If you have multiple audio tracks available, you could also dovetail them in different tracks.
Adobe's online help on this topic is also
right here.