However, and my apologies for being so dim, how do I run it throught lilypond-book? In the section "Invoking lilypond-book" it also states in the first line "lilypond-book produces a file with one of the following extensions: .tex, .texi, or .html, depending on the output format. ". But this still does not make it clear HOW one gets it to produce these files. In short, it seems to be a few steps ahead of where I need to be. I simply don't know (and it is also not explained) where I access lilypond-book.
I think you missed a significant step. That file can't run straight
through LaTex. You need to run it through lilypond-book first, as
described in section 12.6 of the Lilypond 2.6 manual. (Look for
"Invoking lilypond-book" in the table of contents.)