They’re having you finish the raw edge because it’s not being turned under and, therefore, will remain exposed. How you finish it is up to you. If you have a serger, you can just serge the edge. If you only have a sewing machine, you can just do a zig zag stitch or overcast stitch along the edge. If your garment is a knit or fabric that does not fray you can probably skip this step if you wish. If it were me, I would finish the raw edge before doing the basting stitch. I wouldn’t want to risk sewing over the basting stitch, as you’re meant to pull it to help ease it after you’ve folded it so that it lies more flat against the garment. If you stitch over the basting stitches, it might make it harder to pull. As for sewing the hem in place, they basically just want you to hand stitch it. So grab a little bit of the hem and then a little bit of the garment and then just go back and forth. The smaller these stitches are, the less noticeable they’ll be from the right side of the garment. Hope this helps!