Short answers, pulled from the story.
Yarn can be made from natural fibres such as wool, cotton, silk, linen, alpaca, cashmere, and mohair, or from synthetic fibres such as nylon, acrylic, rayon, and polyester, or from blends of both. More unusual natural sources include camel, yak, bison, and even turkey or ostrich feathers.
Human production of yarn is known to have existed since the Stone Age. The process of twisting fibres into yarn can be traced to the Upper Paleolithic, and silk thread and cloth manufacture was already well-established in China by the Shang dynasty, which ran from 1600 to 1050 BCE.
The Craft Yarn Council of America promotes a standardized system in which yarn weight is numbered from 0 to 7. Size 0 is Lace, size 1 is Super Fine, size 2 is Fine, size 3 is Light, size 4 is Medium, size 5 is Bulky, size 6 is Super Bulky, and size 7 is Jumbo.
S-twist and z-twist describe the direction of the final twist in a spun yarn. In s-twist yarn the threads appear to run upward to the left, while in z-twist yarn they run upward to the right. Using both twist directions together in the same knitted fabric can cancel out skewing in the finished piece.
Wool allergies are practically unknown. A study published in Acta Dermato-Venereologica found that contemporary superfine and ultrafine Merino wool does not provoke itch, is well tolerated, and in fact benefits eczema management. Reactions attributed to wool are more likely caused by the physical coarseness of fibre diameter rather than a true allergen.
Space dyeing is a method used to achieve multi-coloured yarn. Sections of yarn are dipped into different colours one at a time, with a chemical called mordant applied between each step to fix the colour permanently and prevent it from bleeding into the adjacent colour.