I've been staring at this and it finally made sense, I think! This pattern wasn't written out very concisely, or there are spaces missing or something, anyways, this is what I think:
Row 1: knit into front and back of first and last stitches
Row 2: knit across
Repeat these two rows until it measures 7.5" along each side.
Row 3: K2tog, knit to last stitch, knit in front and back of last stitch.
Row 4: knit across
Repeat rows 3 & 4 until longest side measures 12.5".
Does that make it a bit more clear??????
Now, with seaming, generally with a knitted item I use the same yarn for seaming (rather than needle and thread) because it coordinates perfectly and because it is very strong and will hold it together. On this page, a ways down under the 'Finishing' section are some videos of different seaming techniques:
Mattress stitch, in my opinion, is the best for seaming but I'm not sure if would work exactly the same in this case since the edges you are seaming together are on the diagonal. Hopefully someone else will have tips on that!
Good luck, and don't be afraid to ask more questions there is always someone here willing to help out! :XX: