In this thesis, we study clustered star formation in nearby star clusters and discuss how high angular resolution observations in the far-infrared regime could help us understand these important regions of stellar birth. We use the increased angular resolution from the FORCAST instrument on the SOFIA airborne observatory to study 10 nearby star-forming regions, and discuss the physical properties of sources in these regions that we can infer from radiative transfer modeling using these new observations. We discuss the design of BETTII, a pathfinder balloon-borne interferometer which will provide significantly better angular resolution in the far-infrared regime, and pave the way for future space-borne observatories. We elaborate on the details of BETTII's core technique, called Double-Fourier interferometry, and how to accurately compute the sensitivity of instruments which use this technique. Finally, we show our design and implementation results of the control and attitude estimation system for the BETTII payload, which poses unique challenges as an interferometer on a balloon platform.