How to get SQL insert and/or update to not lock entire table on MS SQL Server

Chances are it isn't locking the "whole table".

It is locking a row in the table but your SELECT * FROM LAYOUTSv2 tries to read the whole table so necessarily is blocked by that lock.

For the insert case you can merely specify the READPAST hint to skip past the locked row- however that will not give your desired result for the UPDATE case (it will skip the row again not read the starting version of the row).

If you configure the database for read committed snapshot isolation this will give your desired effect for both cases (at the expense of greater use of tempdb)

The insert and update statements are supposed to create row-level locks. However, when the number of locks in any transaction is 5,000 or more then a lock escalation occurs and it creates a table level lock. Please see below.

https://technet.microsoft.com/en-us/library/ms184286(v=sql.105).aspx