I haven't started the front panels yet. You're right, the instructions are confusing, but by looking at the diagram and the sweater photo, I'm interpreting it as follows:
If you're working on the left panel, for instance, on the RS, you'd actually have to do seed stitch first, and then knit to the end for stockinette. And then on the WS, you have to purl to the last four stitches for stockinette, and then do seed stitch on those. Something like that. As long as all the seed stitch is on the same side, opposite from the side that will have the raglan shaping.
People who've finished, is that right?
If you're working on the left panel, for instance, on the RS, you'd actually have to do seed stitch first, and then knit to the end for stockinette. And then on the WS, you have to purl to the last four stitches for stockinette, and then do seed stitch on those. Something like that. As long as all the seed stitch is on the same side, opposite from the side that will have the raglan shaping.
People who've finished, is that right?
that's exactly what i did. and to answer your original questions, i stitched the design on the front panels after i was done. and i used some superwash sock yarn, i no longer have the tag so i don't know the brand name - sorry i'm not more of a help in that regard.

























