Pic 78: The first sail is sewn on to the first yard. It's sewn on with a simple running thread, but to get the loops upright you need to lead each loop back through the base of the last. Sounds harder than it is - after a few attempts you will figure it out.
The holes, as I understand it, were to let water drain away if the sail dipped underwater in heavy seas. Otherwise, the pressure of the water could have broken the bowsprit.