Help with calendar

Hi,
Questions:
I'm wrestling with a calendar spreadsheet and can't even figure out how it works. I'm having problems figuring out the IF/THEN statement that drives the month's day cells, and how the little cell with "1902" relates to the year in the upper left corner. Those are my frustrations.

Problem:
What I'm trying to do is generate the month of December for the prior year located in the upper left of the month area. Our company calendar year includes the last two weeks of the prior year for payroll and leave balances (I hate when companies do that and use a 26 pay period schedule!!!). Anyway as you see it I copied and pasted the month of December from the lower right and put it at the upper left. But I need to fix it so the days fall on the right days of the week.

Bonus:
Ultimately I'd like to enter the dates at the left and have it automatically highlight the calendar on the right according to the green, red, and blue color coding. Currently I do this manually.

Any help answering my questions and solving my problem would be greatly appreciated.

Thanks,
Kris