If you want to multitrack, use Reaper instead although Audacity does well with that job too. I suggest looking through the Plugins and Soundfonts sticky, you will see a lot of free DAW software there as well.
I use Sonar at my DAW and I usually engage track layers and loop a segment during which we record several passes. We then 'comp' a track by using the best passages per segment. Sometimes an entire song gets completed this way. Often the the first take will be one pass over the entire song, then the succeeding dubs are usually to correct 'errors'. In some cases when we want to experiment with different voicings, do we do the layer process. It all depends on your workflow.