if all you’re trying to do is move the eyelet inward one stitch, then it should be pretty simple, to just increase the initial knit stitches on each row by 1 (cast on 4, and then, if it says knit 1, you knit 2 instead… if it says knit 2, you knit 3, and so on). but it doesn’t impact the initial cast-on of 4, or the stitch count of 50 in the middle. what it may impact is your 1st knit row. because you wouldn’t have enough stitches in order to knit more than the recommended with the yarnovers, i think you’d need to do 2 knit rows initially, and the 2nd one should have just the yarnovers in order to get the correct amount of stitches for the next row so you can do the k2tog’s… (if your adjusted pattern means you need 6 stitches, but you only have 5, you’ll need to do another knit row with a yarnover to get to the right number, etc). same with the decreasing, you’ll need to watch your stitch amount when getting towards the end, so that you still end up with 4 stitches at the end for binding off.
2 notes on this & similar patterns - they stretch, so a lot of people end up with a diamond, or kite shape, rather than a square. good yarn tension helps with this, so does practice. seriously, dish cloths are my new practice swatches. also, if you want smaller eyelets, the Make-One technique does that, and doesn’t have the issue multiple yarnovers can have of stretching out or getting lost off the needles.
You could do the wider border, k3, but it might be best to cast on 6sts and knit for 2 or 3 rows. Follow the pattern with k3, yo, k to end as you suggest. The cast on of 6 will put the initial yo in the middle of the row.
For the dec, k2, k2tog, yo, k2tog, k to end.
That should work but give it a try and see if you like it. You should know fairly quickly because it starts with so few sts.
I believe it’s the Traditional Dishcloth Pattern, the first one in the link.
Grandmas favorite dishcloth? I’ve changed the border on them without changing anything. No matter the border width you cast on the same number. The size of the cloth itself is adjust by how far you increase before starting decreases.