"Using your yarn needle"
means to use the tapestry or large-eye yarn sewing needle
"weave the tails into the center of the top edge of the bookmark and loop both pieces into a knot at the edge of the bookmark"
without actually being able to read the entire pattern instructions, we're kinda in the dim light here... but it kinda sounds like 'take the loose ends and tie them together'
a bookmark is a pretty easy project, and fast to finish
Anything hand-made is personal... if it looks good to you, it will probably look fantastic to others. Don't sweat the small stuff... just do what feels and looks good to you.
KNIT ON !!