Baby Bonnet -SOS

Hi All!
I am following the pattern for the bonnet found
at the link I pasted here. I am totally lost on
what to do with the instructions starting at the ***.

Neck and chin band: Fold 5 sts along
front edge to RS and secure at cast on
and cast off edges. Thread yarn through
each st at shorter edge (back of Bonnet).
Pull tightly and secure yarn.

***With RS of work facing, pick up and knit 37
(42-46) sts
along cast on and cast off edges (working
through both thicknesses at each end).
Cast on 14 sts. 51 (56-60) sts in total.
Knit 1 row.

Wanted to add, the video helped on picking up stitches was helpful, but I am still a bit confused as it says pick up and knit. Does this mean to first pick up and then to knit those stitches? Also, the pattern says to pick up and knit along cast on and cast off edges. Does that mean separately, or I am putting them together? And, if it is separately, am I starting at one end and working around to the other?

Thanks for helping!

I think that these questions were answered in your other post.