I believe that you reverse the seams on the collar so the shoulder seams are inside the sweater and the collar seam is under the collar.
Amy has video on picking up stitches. You'll pick up 12 stitches between those markers and that will be the top of the sleeve. You probably won't need to pick up on every stitch, so just pick up 6 between the first marker and the shoulder, and 6 after.
"Trust the pattern!"
Time flies like an arrow, but fruit flies like a banana.
Hop aboard while we follow the cloud-covered van of knitting harmony, man!! Woooo!! --Hedgehog
IngridKH on Ravelry