Your questions are good ones, but it is hard to know where to begin to answer
them. For a start, you should look at any modern cell biology textbook (try,
for example: "Molecular Biology of the Cell", by Bruce Alberts et al, Garland
Publishing, New York; or "Molecular Cell Biology", by Harvey Lodish et al,
Scientific American Books, W.H. Freeman, New York). In any such book you
will find detailed descriptions of the basic mechanisms underlying such
events as the decoding of DNA sequence, and cell and tissue differentiation.
A few minor misconceptions and answers to some of your direct questions:
> DNA consists, in fact, of very simple sequence information, but there
is a lot of it. We can now read DNA sequence from essentially any organism
quite readily. Interpretation of how these sequences exert their ultimate
effect on organismal physiology can require many years of work, however.
> The mechanisms by which cells decode DNA sequence are intrinsic to each
cell, and are now quite well understood (see texts such as those cited
> It is true that DNA sequences provide the essential code governing how
a cell may develop, but manifestation of this developmental pathway is
extensively regulated by the environment in which the cell finds itself.
With your respect to your question about how a cell 'knows' whether it is
in the 64th or millionth division, and when to differentiate into a brain
cell (for example), it is the local environment of the developing nervous
system which pushes brain cell differentiation forward, NOT the number of
cell divisions since fertilization of the original unicellular embryo.
Although cells can progress down a developmental pathway beyond the point
of no return (i.e. your fully developed toe will not form brain tissue if
transplanted into your head), moving embyronic tissue from one place to
another can indeed change a cell otherwise destined to become skin into
brain tissue. The local environment within the developing nervous system
is itself a product of interactions between genetic material and the
environment in the primitive embryo, and so on. Environmental influences
can be traced back to the physical point at which the sperm fertilizes
the egg, and which end of the embryo is up and which down, etc. In fact,
environmental effects can be traced back further, to maternal and
paternal influences, but that is a more complicated (or, at least, less
well understood) story.
Best wishes in your quest for understanding -- D.S.Roos