ok 1/4 and 1/2 watt show how much power can pass through your resistor. Basically it's liek don't use a tiny part if youre going to have gobs of electricity coming out of it.
the 5% is the tolerance. It means you need 2.7kohms. It can be withing 5% of 2.7 kohms. down to 2.56kohms or up to 2.8kohms. If the circuit doesnt say to use a specific resistor, like "need low tolerance", generally 10% is OK to get away with.