nginx: how to set up server blocks to allow subdomain - nginx

Question

I have openresty running on my aws instance (Instance A) and the ip address of the server is already tied to the domain name myapp.john.com.
My app is running on another aws instance (Instance B) within the same private network. It has private ip address of 192.42.56.87 and the app is running on port :80.
I want to set up my openresty / nginx such that when visiting prod.myapp.john.com, nginx directs me to 192.42.56.87:80. And when visiting test.myapp.john.com, nginx directs me to another instance (Instance C) running the test version of my app, say on 192.xx.xx.xx:80
Below are code in (Instance A):
Main config file /usr/local/openresty/nginx/conf/nginx.conf is defined as:
# Main NGNX Config File
#user www-data;
worker_processes auto;
pid logs/nginx.pid;
error_log logs/error.log info;
error_log logs/error.log notice;
error_log logs/error.log debug;
events {
worker_connections 1024;
}
http {
include mime.types;
default_type application/octet-stream;
log_format main '$remote_addr - $remote_user [$time_local] "$request" '
'$status $body_bytes_sent "$http_referer" '
'"$http_user_agent" "$http_x_forwarded_for"';
access_log logs/access.log main;
sendfile on;
tcp_nopush on;
tcp_nodelay on;
keepalive_timeout 65;
keepalive_requests 100000;
resolver 8.8.8.8 valid=30s ipv6=off;
ssl_protocols TLSv1 TLSv1.1 TLSv1.2; # Dropping SSLv3, ref: POODLE
ssl_prefer_server_ciphers on;
gzip on;
# Include all the sites for the domain
include /usr/local/openresty/nginx/sites/*;
}
/usr/local/openresty/nginx/sites/prod.myapp.john.com is defined as:
server {
listen 80;
listen [::]:80;
server_name prod.myapp.john.com; // this does not work; but "myapp.john.com" works
return 301 https://$host$request_uri;
}
server {
listen 443 ssl;
server_name prod.myapp.john.com; // this does not work; but "myapp.john.com" works
ssl_certificate /etc/letsencrypt/live/myapp.john.com/fullchain.pem;
ssl_certificate_key /etc/letsencrypt/live/myapp.john.com/privkey.pem;
location / {
proxy_pass http://192.42.56.87:80/;
expires 0;
proxy_set_header Host $host;
proxy_set_header X-Real-IP $remote_addr;
proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
proxy_set_header X-Forwarded-Proto $scheme;
proxy_buffer_size 128k;
proxy_buffers 4 256k;
proxy_busy_buffers_size 256k;
}
}
Now, in chrome browser when I visit prod.myapp.john.com, there is no response at all since the request never get to my Instance A;
However, if I change
server_name prod.myapp.john.com
to
server_name myapp.john.com
it works and the web page gets rendered.
Why?
How can I include more site files in /usr/local/openresty/nginx/sites/ and set the server blocks in config correctly to provide more subdomains on my site?