After lowering the keel and inserting the locking bolt (by now you probably figured out where it goes?) you unhook the cable from the tip of the keel, and reel in the cable on hte winch. Originally, there was a pole with a "V" shaped end that was used to fish the cable down to the keel before raising, and to unhook it after lowering (we eventually just used a boathook). The Keel Plug "seals" the bottom of the keel well to reduce turbulance and any surging of water up into the keel trunk. There is a separate cover that covers the hole in the cockpit sole and further ensures dry feet.
Yes, you do need to use the locking bolt. It keeps the keel in position and will reduce wear and tear on hte pivot bolt and pivot hole in hte keel. The locking bolt also serves as a back up "keel retention" if (heaven forbid!) the area around hte pivot should break on hte keel. (Keel is made with a steel/iron backbone encased in a fiberglass/resin fin with a 360# lead bulb cast onto the end of that backbone. The pivot point is part of the backbone or welded on to it). The web site that Jim refers to has a link to a description of rebuilding the keel by one CAL 21 owner. That includes a drawing of what the keel is made of.
The cable conects to the tip of the keel for raising/lowering using either a small notch molded into the lead, or some boats came with a nice stainless-steel hook in hte tip of the keel. (the hook will be easier to catch with the loop on hte keel cable, but hthe notch works if you are careful!) On some boats the owners have replaced the notch with an aftermarket hook or other attachment.
Watch the winch board while raising/lowering the keel, once you pass a certain point while lowering, or until you reach that point when raising, the pull on hte winch tends to make the winch board want to slide forward along the seats. We intended to add a couple of braces to the winch board to hold it aft, but ended up selling the boat before we did that.
Oh, and there is a copy of the Owners Manual on that web site as well.
) or use Jim's link.