craftgrrl | I need help again, please!!!!

I need more help with this dang baby sweater. I’m so confused and I hope someone can make this sound easier then it is sounding. I think I picked to hard of a project to start with, but that’s what I do. ;) Anyway I am confused on these parts…

**Now is the time to divide things up If you prefer it put each section on a separate length of spare yarn - I don’t usually bother if I am knitting the sleeves first. BUT if you want to make this totally seamless, see the note at the end.

So does this mean I slide this first section of the baby sweater off my needle and put it on a separate piece of yarn? Or do I have the option of leaving it on my needle? I don’t understand how I would slide it off my needle if I were to proceed with the following instructions…

Sleeve: Slip sts from first (front) section up to marker (should be 22 sts) on to right hand needle.
Cast on 2 sts, knit across sleeve section (27 sts), turn and cast on 2 sts, purl back.
Continue to work in stockinette st for 22 rows.
Next row: K2, (K2 tog, K3) 5 times, K2tog K2. Knit 7 rows. Cast off

Okay so I see the 22 sts. I am understanding the slip sts, as far as I know. I slide the 22 sts off the left needle onto my right needle, yet the working yarn is all the way to the far right now. I am confused as to how I am to cast on 2 sts, when the working yarn is all the way to the far right. Also I can’t figure out how to cast on any sts at all even if the working yarn is to the left of my 22 slipped sts.

Clear as mud? LOL!

Hopefully this picture can give a better idea what I am trying to say.