You were knitting in the round up to this point, with a knit side facing you for all of those rounds. But now that she is saying to work on the 70 st separately, with 35 st per section, you will be working front sides and back sides, ie "flat knitting" with purl/wrong sides and knit/right sides facing you.
Since the last row you knit before separating the 70 st was a right side (knit side) facing you...a wrong side (purl side) will be facing you for the first row of the 35 st section (with the instructions to BO2 at the beginning of that row)...so BO2 and finish the row as usual. Then you will turn the work, and the right side (knit side) will be facing you once again...and you will complete the bind off requirements and BO2 at the beginning of this row...and finish the row as usual, and turn the work again. Now, the purl side is facing you again. You will now follow the direction to "purl 1 row". (this makes sense) Then you will turn the work, the right side (knit side) is facing you...and you will follow the directions for R1 and R2. Then you will Repeat R1 and R2 twice. (R1 is a right side/knit side facing; R2 is a wrong side/purl side facing...so this too makes sense)
Then you will follow the directions for this section by Knitting 5 rows in st st...which means you knit the right side and purl the wrong sides. (pattern says K5 rows in st st)
Now you are at the Neck Shaping!