Narrowing is for the taper of the tail cone, yes.
I did not flute those parts until later (10-12 step 3) where you basically flute the two-holed tabs as much as you can. The top skins do not fit until you do.
Those parts are big and floppy enough that they bend and fit fine. Note that you really don't do anything with this bulkhead until mating it to the fuselage. The instructions are a bit unclear about this in some places (eg, dimpling the stiffeners). My understanding is that you pretty much do no final ops (drill, dimple) to anything involving this bulkhead's flanges and associated holes in the skins and stiffeners until mating to the fuselage. It's just along for the ride for alignment purposes.
Also double check all the tabs on the frames and bulkheads to make sure they're fair with the others or you'll have a hard time installing the skins. They want to buckle out a bit if you flute and the tabs along the tight radiuses need to be bent to make the radius smooth.