You said that the pattern is from the 1960s or 1970s, so I'm guessing that there isn't a link to the pattern online?
Based on what you've described, it seems relatively straight forward though ... the way I read it:
1) Yes, you are right .... this means that you cast off 45 stitches at the beginning of the row, then knit to the end of the row. On the next row, you cast off 45 stitches again and then knit to the end of the row.
2) Now, using the stitches that you have left, you continue knitting in Stockinette Stitch (which I assume you have been doing already). From this point, you will need to keep track of how many rows you have knit. After you have finished #1 above, you will knit 8 rows in Stockinette, then on the 9th row you decrease 1 stitch at the beginning and end of each row (if they don't specify how you should decrease then a simple K2TOG should be fine). Now, you'll want to repeat this "decrease row" every 4th row (so knit 3 rows, then do a decrease row) until you have 12 stitches left on your needles.
Hopefully this clears things up a little bit for you ... if you're still unclear let us know what part is troubling you and I'm sure someone can help!