I hope these help...
The "paddle" goes about 3 inches into the frame. There are some screws that go from the bottom to the top, with wing nuts on top, to hold it to the headrest tubes. I didn't cut any holes into the headrest tube - there is just a flat piece of metal that I am using with the wing nuts to make a clamp. There is a picture of that from the top further down. You can also see how the handle of the paddle has 2 layers of wood. I had do a bit of shaping and rounding on the edges to get a nice tight fit of the handle in the frame.
And I added some zip ties in the back to hold it down. There is a zip-tie sized hole near the corner of paddle.
You can see the wing nuts below. The cushion sits on top of them and they are low enough so that I don't feel them when I ride. The bag has a small strap that snaps together in front of the headrest (can't really see it in the photo but it's there). And I don't use that "hood" of the bag, which you are using to go over the headrest, at all. That way my headrest is not squished and there is more cushion for my head.
Oh, and I almost forgot to mention - the best part of this is that I can stick a camel back bladder in the bag (actually 2 if I really want to), and run the hose out through the top. When I want a drink, I reach back, pull out the hose just enough to drink, then I can push it back into the bag when I'm done, so the only thing sticking out is the bite valve. Very handy.