What does it all mean?

My sweater pattern says that when I’m decreasing for the arm holes I am to "decrease one stitch at every edge, every other row for seven rows until 56 stitches remain."
Does this mean I decrease every knit row and count the purl rows as rows, or do I decrease every other knit row?

Yes, the purl rows count as rows.

You would decrease on every knit row.