If you want to link your second project with your first project, don't add the first project in form of a JAR file to the second.
Instead open the project properties of the second project and select "Java Build Path". On the right side on the "Projects" tab you can add your first project as "required project on the build path".
The class files of project 1 are now added to the class path of project 2. And if you click on a class name you directly get to the source code.
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