Which film uses candid, observational footage to reveal hidden insights about its subject?

The film that uses candid, observational footage to reveal hidden insights about its subject is "High School." This documentary takes a direct cinema approach, capturing the day-to-day life and interactions of students in a high school setting without manipulation or scripted dialogue. This observational style allows the filmmakers to present an authentic view of the experiences and challenges faced by students, giving the audience a deeper understanding of the high school environment and the dynamics within it.

In contrast, "March of the Penguins," while also a documentary, focuses on the life cycle of emperor penguins in a structured narrative format that includes voice-over narration, which provides context and direction, rather than purely candid observation. "Won't You Be My Neighbor?" offers a more biographical view of Fred Rogers, incorporating interviews and retrospective storytelling, which does not align with the raw observational technique. "Exit Through the Gift Shop," while documenting street art and artists, employs a more stylistic and narrative-driven approach that mixes reality with artistic interpretation, rather than straightforward observation. Hence, "High School" stands out for its commitment to an observational format that reveals hidden truths organically.