Steps 5 and 6 covers foot / shoe / cleat rotation.
Step 7 covers lateral foot / shoe / cleat placement.
In short, and in my own words / experience:
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Cleat Rotation: Set to place the foot in the middle of the float range, in the majority of pedaling action. You want a little float each direction to allow the system to prevent overloading on the joints (mainly the knee).
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Cleat Lateral Placement: Set to place the foot as needed to support the rider. Common thought is get the foot under the knee, but this is highly subject to the natural limb and joint alignment of each rider. Sometimes the best place is an extreme inner or outer placement because of their support needs.