Given an alphabet of {a,b} where Na denotes the number of occurrences of a, and Nb the number of occurrences of b:
1) L1 = {xy|Na(x)=Nb(y)}
2) L2 = {w|Na(w) is even, Nb(w) is even}
Wouldn't a single DFA with four states and using mod be able to accept both languages?
There is indeed a four-state DFA that accepts $L_2$. If the initial state and sole accepting state is $q_{00}$ and the other states are $q_{01},q_{10}$, and $q_{11}$, the transitions are
$$\begin{array}{cc} q_{00}\overset{a}\longrightarrow q_{10}&q_{00}\overset{b}\longrightarrow q_{01}\\ q_{10}\overset{a}\longrightarrow q_{00}&q_{10}\overset{b}\longrightarrow q_{11}\\ q_{01}\overset{a}\longrightarrow q_{11}&q_{01}\overset{b}\longrightarrow q_{00}\\ q_{11}\overset{a}\longrightarrow q_{01}&q_{11}\overset{b}\longrightarrow q_{10} \end{array}$$
which appears to be the machine that you had in mind.
Note, however, that $ab\in L_1$: just set $x=a$ and $y=b$ in the definition of $L_1$. However, $$q_{00}\overset{ab}\Longrightarrow q_{11}\;,$$ so this DFA that accepts $L_2$ does not accept all of $L_1$.
In fact $L_1=\{a,b\}^*$: every word over the alphabet $\{a,b\}$ is in $L_1$.