1. I have a pattern that says Knit5, Purl, last 5 stiches knit.
There are 127 cast on sts. Does this mean knit 5 sts, purl everything else except the last 5 sts which are knit?
2. Also, another line says: Knit 5, *k1, yo, k2 together*
Does this mean: knit 5, then in the repeat section, knit 1, yarn over 1, then knit your yarn over loop with the next loop?
In my answers, I am assuming you are knitting right handed, that is knitting the stitches from your left needle over to your right needle.
1. Yep, knit the first 5, purl everything until you get to the last 5, then knit the last 5 - you got it!
2. Whenever you see the asterisks, you're going to repeat what's between them over and over. In this case, you will knit 5, then
knit 1 as usual.
take the yarn around the right hand needle to make a yarn over
then knit the next two stitches on your left hand needle together. (not the yarn over, which should be just hanging out on your right hand needle.) To knit two together, just put your needle through both of them and knit them as one. This is a decrease, and can be seen here:http://www.knittinghelp.com/knitting/basic_techniques/decrease.php
What you're doing here is this. You knit one, you add one with the yarn over, and take one away with the knit two together. this allows you to make a pattern without having more stitches at the end of your row than you had when you started. So even though you're doing Knit 2 togethers on that row, all of those yarn overs will make the stitch count come out even at the end.
hope that helps!