I've no idea what the fraction is referring too and Sheldon hasn't helped...
The fraction is the ball diameter in inches. As @user47620 says, you can use a greater number of loose balls rather than a caged set, in fact for a headset which just reciprocates rather than rotating at high speed, loose balls are actually better, manufacturers just use cages to make assembly easier. To get the correct number of balls, just fill up the cup with balls until you can't get any more in, then remove one. Use a light coating of grease to get the balls to stick in the cups in the right place, i.e. all of them actually touching the race rather than just swimming in grease, and pipe a nice bead of extra grease onto the cones when it comes to final assembly.
Yes, that's absolutely critical. The curvature of the cup and cone races is cut to match only one size of bearing ball. If you use the wrong (too small) size, the contact pressure will destroy the races in no time at all.
The fraction is the ball diameter in inches. As @user47620 says, you can use a greater number of loose balls rather than a caged set, in fact for a headset which just reciprocates rather than rotating at high speed, loose balls are actually better, manufacturers just use cages to make assembly easier. To get the correct number of balls, just fill up the cup with balls until you can't get any more in, then remove one. Use a light coating of grease to get the balls to stick in the cups in the right place, i.e. all of them actually touching the race rather than just swimming in grease, and pipe a nice bead of extra grease onto the cones when it comes to final assembly.