Row 2: K1 (k1, yo, K1, yo, K1) all in yo, k1 - 7 sts. What does this mean??? I know what k1 and yo mean, but am having trouble interperting the instructions. Thanks in advance for any help!
From what you’ve written it looks like you’re making a bobble which means you do all those things in the parenthesis in ONE stitch.
If you can include a link and pattern name when asking questions it would help us help you. 
Or it could be for nupps on a shawl. You make 7 sts out of one - knit into a st, wrap the yarn around the needle, knit into it again, wrap, knit, wrap, knit and then let the st off the left needle.