I figure out what that black goo was.
I'm starting to think that it was food brought to that planet by the engineers because it was on their ship in cannisters. And in the beginning, the engineer drank the black goo and died.
So, back on that other planet where the rest of the film takes place, I think the chemical reaction between the engineers respiration and the atmosphere of the planet somehow contaminated the black goo (food). When the engineers ate the contaminated goo, they died from infection.
The contaminated black goo (food) mutates other living organisms after being ingested, like those parasitic wormlike insects that were living in the dirt, into hostile giant lifeforms that have their own reproductive cycle. And just like all other lifeforms, they go through evolution. The first face hugger was giant because it came from a giant human. The first xenomorph becomes a giant queen that looks more humanlike because its DNA sliced with the giant engineer.
Hopefully the other prequel movies will explain how subsequent xenomorphs looked more insectlike.