Even having the book in front of me, I can't quite figure out what he is doing. Also notice that the chain is crossed over from the large chainring to the 2nd largest cog. And look at how the top chain is coming off the chainring at the rear of the front derailleur. The pic was apparently snapped after an unsuccessful shift!

Regarding the tool selection, they probably did not want to scare off potential buyers by showing specialized, expensive tools. The implication was that bicycle mainteneance is simple and easily accomplished with a few standard tools. Remember, at the time, derailleur equipped bicycles were a strange and complicated piece of machinery to almost everybody in the USA. To this end the back cover was emblazoned with "Everything Necessary ofr Zestful Riding and Painless Maintenance".