Am I missing something?

#1

This keyhole top is making me a little batty! First of all, after I cast off a few stitches I was supposed to start with a k2 p2, but it was mixed up. I think also the measurements are wrong. I am only 19 inches from the top of my neck to where the top would end, and If I make it according to directions, this is going to be a dress on me! Anyway, I am a bit confused on the keyhole- shouldn’t I have to cast off some? There are no instructions to that effect…
BACK SIDE:
Row 2: WS (P2, K2) repeat across ending with P1.
Row 3: RS P1, (K2, P2) repeat across ending with K2.
Work in pattern until back is 3”, 3”, (4”) from back marker. End on WS row.
BACK ARM HOLE SHAPING:
Count 39, 47, (53) stitches and place marker.
RIGHT SIDE BACK:
On WS, Using straight needles, (P2, K2), repeat across to marker ending with P1.
39, 43, 47, (51, 53, 57) sts.

#2

From the photos it looks like the ribbing on either side of the back keyhole pulls enough to make the opening.
The keyhole is centered so divide your sts in half as you suggest. If there are no other cast offs or armhole shaping it may well be a mistake in the pattern.
One of the advantages of knitting a pattern is that you can adjust it to your size. You can place the keyhole where you think best and adjust the length to suit your measurements. The best place to adjust length is between the bottom hem and the armhole bind offs.