Very elegant pattern! Thanks for the link.
You could work the first stitch in each row as GG suggests or you can slip the first stitch in each row. It depends on the kind of edge you'd llike on this bolero. If you slip the first stitch, just consider it one stitch of the p2 in row 1 or one of the two knit stitches to start row two. Then the first row becomes
slip 1, p1, k2, (p2 k2) to last 2 stitches, p2
row 2: slip 1, k1, p2 (k2 p2) to last 2 stitches, k2
The calculations that you did at first (measuring the length between your shoulders and adding for the sleeves) determined the width but the 3.25 + 3.25" is to add ease to the length. Measure the circumference of your upper arm and add 6.5' to that to get the length you should knit.