How can I fix the blur on the top of my iPhone?

You’ve got two separate areas and causes you’re observing.

The image of settings app is the transparency that Apple iOS uses as a style feature and all iPhones will display it, if on your iOS version. My iPhone 15 PM, my wife’s 12 P and my son’s 14 PM show it. It’s normal.

The second image is displaying what’s known generically as OLED bloom or bleed. It can be more or less visible depending on screen brightness, screen protectors, ambient lighting and even physiological differences (people with astigmatism).

The bloom may be able to be made less noticeable by changing background colors, lowering contrast, removing screen protectors etc.

You may find some settings in Accessibility the help with both blooming and transparency.

Sorry, I’m not seeing it in the screen shots you posted.

If you can see it looking at the screen, but not in the screen shot, it’s a physical problem with the display. Have it serviced.

It’s impossible to say since we can’t see what you’re seeing…