Hello!
Firstly, thanks for your feedback. While I will not remake this part of the campaign, I can learn from it and make the second one better.
As for your questions, the rooster is a pool of resources you use for army building. Once you have prepared it, you use it as if you were making a 500 pts army normally. This means that you can allocate the aforementioned magical items as you wish. Mundane equipment is an exception as it can be bought during the list building step.
Take note however that the standard Warhammer the Old World rules for creating armies still apply when making your 500 pts list. The campaign rules are only additional restrictions on top of these.
Lastly, in certain parts, the campaign is a bit vague on purpose. It is because I believe that certain choices should be made by the players within their groups, as they know best how they like to play and what works best for them. So don't be afraid of discussing such topics with your friends and making your own rulings, the campaign was inteded for you to do so.