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I'll give you my understanding: A balanced engine is when the entire rotating assembly is weighted to be in balance. All the rods and pistons would be exactly the same weight and the crank would also be spin balanced similar to a tire.
Blueprinting is the process to make all the surfaces true. The crank would be aligned to the block and centered in the block journals, then the deck of the block would be trued or decked to a parallel plane with the crank. The cylinders would then be aligned bored to be perpendicular to the deck and the bores would be checked and trued for roundness.
The heads would also get similar blueprinting treatment.
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