I think the best way to understand this line is to take a pair of classical jeans and to examine their construction (see here: [link]). The top part is cut as a separate piece, and you may draw that line in any place you want: higher, lower, etc. You may even don't cut it but make a decorative stitching double line there. Hope it helps.
I'm sorry but there are so many tutorials on sewing I just don't feel a need to compose another one... There are lots of ways to sew the pieces together. I'd suggest for you to search for instructions on making human jeans, maybe even on Youtube if any.
Yes, you need to cut 2 mirrored pieces of each part.