First of all, you can not sew welt without a welt foot. If you try to do this, you will make a gigantic mess out of whatever you try to sew that requires welts. A welt foot for your machine will cost about $35.00 at most. Why would you destroy a hundred dollars worth of fabric to save $35.00, and try to do this without the proper equipment?
The reason you had such bad luck with a project out of Taylor's book, (or the Taylor -Mangus book) is that it is explained so poorly. I have been sewing and upholstering for 34 years, and what they describe is to me, incomprehensible. In fact, none of what they show in their books is a complete description of anything. None of the projects they describe are ever followed through to completion. My opinion of their book (books) is that they are disjointed at best.
Your problem is as follows: 1) For heaven's sake, put a new needle in your machine. The eye in the needle may be doing the damage to the thread you describe. 2) The tension on your machine might not be set correctly. It may be sewing correct stitches in some instances , but the tension is set too tightly, both on the bobbin case and through the upper tension mechanism, or not fed through your machine properly. If the tension is set too tightly it can cause the problem you describe, especially with polyester thread. Or......the twist of your thread is incorrect for your machine. Thread comes with either a right twist or a left twist. If you use thread that is not compatible with your machine, it simply will not work. 3) The needle bar is the shaft that holds the needle. It goes up and down with the needle, and could not have been damaged by the needle itself, because it holds the needle. What the needle passes through, in your case, is the inside part of the presser foot. 4) The "manual" you describe is the same for every machine out there. It is not intended to teach you how to sew, it assumes you already know how to operate an industrial sewing machine that cost you well over $1000 new, and tells you what you need to know to adjust the machine, not to operate it correctly. This is the perfect reason to buy a sewing machine from a trusted local dealer. Will it cost you more? Yes. Will it save you untold grief? Yes. Is it worth $150 to $200 to avoid all these problems? Yes. If you had bought this machine from a reputable local dealer, it would have been set up to sew perfectly from the git-go, and any questions you had would have been answered before you ruined your seat.
I have been sewing with the same machine for 25 years, and today it would not sew a correct stitch. The lower tension appeared to be wrong, but no matter what I did to adjust the lower tension, I could not correct it. I finally loosened the tension on the bobbin case so far that the tension adjusting screw came out. In order to put that screw back in, I had to remove the bobbin case, or risk dropping the screw into the bowels of the machine. It was only then that I realized that one of the screws that held the retainer that held the bobbin case in place was loose and was what was causing the problem in the first place. Would the manual have told me that? No, but a reputable dealer may have been able to troubleshoot it over the phone.
I apologize for the long post and the endless preaching, but sewing is a skill that is learned over time with tons of practice. It can not be learned without endless failure.
No one lives forever, the trick is creating something that will.