It's a superwash wool so it will not felt.  Machine wash away.

I would agree with prior commenters that it looks as if you're pulling things too tightly.  It looks to me as if everything is okay.  The only other thing that could possibly make a gap like that is if you dropped a cast-on stitch off the left needle before you were able to knit it onto the right needle and I'd think if that happened you would have seen it and recognized it.

Bamboo is a very, very slippery yarn, especially for a beginner, and especially if you're using non-wooden needles, which it looks like.  I advise all beginners to use wooden/bamboo needles for, as sozeeq mentioned, their "grabbiness." 

With respect to your equestion regarding the end, just leave it hang until you're finished then weave it in on the wrong side of the project using a yarn/tapestry needle.

I find the best "tutorials" are videos on how to do specific things.  For that I would recommend www.knittinghelp.co m.  Videos from casting on (getting the yarn onto the needles), to the basic knit and purl stitches, to more advanced things.  You can also use YouTube for stuff like that.

In the first three pictures it looks to me as if the off-white material is bulky, possibly hand-spun, yarn - single ply.  The colored material may possibly be "roving," or the fiber before it is spun into yarn.

The wooden things are purse handles and you can use any material for the purses that can have a flap of some sort go through the slits in the handles to attach the purse to the handle.

The wire hoop is of a sort I used to use several years ago when I would macrame plant hangers.   

And the bottom one is a crochet hook.  There should be a letter or millimeter stamp on the hook somewhere to let you know what size a hook it is.

VERY pretty.  I must finish mine.  Maybe over Thanksgiving break.

You could use whatever you have - but make sure that it won't snag the yarn and that it's not tapered except at the very end.

Since the pattern says every following alternate row - I read that as not EVERY row - but every other row.

OMG THANK YOU, THANK YOU, THANK YOU.  I totally get it now.  THANK YOU!

LOL - isn't it awesome when the light bulb goes on?

Just promise me we'll see a pic when it's finished - that's a cute pattern.

The "11" refers not to ROW 11 - but to how many times you repeat the decrease.

In knitting patterns, the number for the smallest size is NOT in parentheses.  The next sizes are in parentheses, separated by commas.  So just ignore the 11 since you're not knitting that size - it's not a reference to the number of rows.

You're starting with 39 stitches and you end with 15 stitches.  That means you'll need to decrease 24 stitches total.

You decrease the 2 stitches every other row a total of 9 times - 18 stitches.  Then, every fourth row, you decrease the 2 stitches a total of 3 times - or 6 stitches.  That totals 24 stitches decreased, total.

On those last decreases, instead of decreasing on EVERY Right Side row (which would be every second row) you'll decrease ever OTHER Right Side row (or every fourth row).

I love being an enabler.   

I think that usually the best way to avoid holes when you're wrapping and turning is to make sure that you knit the wrap WITH the stitch it's wrapped around.