The length of the prop is equivalent to the amount of 'traction' that it has, i.e. the more surface area it has to affect airflow. The pitch is the forward movement ( in inches ) of the prop per revolution. So a 7 pitch prop will pull the plane 7" per revolution. Of course that is a simplified explanation but its a close approximation and a comparative measurement.

For a given engine like your .40LA, a range of props is given that depend on how you want to fly and the type of aircraft flown. For instance a trainer might best work with a prop that has a lot of "traction" (length) but not so much speed (pitch). Rpm (rev. per minute) is also affected inversely by prop length and pitch. A pylon racer would prefer a greater pitch while spinning smaller length prop to gain some rpm.

If the manual is recommending a larger length and greater pitch to break in the engine, it is probably to keep the rpms low until the engine is broken in.