"1) My pattern is a 21 row repeat. The 1st AND 21st rows are knit. This does not make sense to me. On the second repeat would I start with a purl row and do the opposite of the first repeat? "
When you finish row 21 (a knit row) on the chart, the next row is row 1 (a purl row). You'll just keep following the chart from row 1-21 and then repeat rows 1-21, etc. So yes, row 1 will be a purl row on the second repeat. Actually, it'll be easier in practice than you may think. You just won't be able to correlate odd rows with knit side and even rows with purl side because the st will change with the pattern repeat. I think it would halp if you copy the pattern and mark off rows or use a row marker to count the rows.
Yes, very good looking sweater. Good luck with it and enjoy making it.