he was troubled

"he was worried." Herod was worried that this baby would replace him as king.

all Jerusalem

Here "Jerusalem" refers to the people. Also, "all" means "many." Matthew is exaggerating to emphasize how many people were worried. Alternate translation: "many of the people in Jerusalem" (See: rc://en/ta/man/translate/figs-metonymy and rc://en/ta/man/translate/figs-hyperbole)