For this scenario, the sentence "The US Contact modifier is -1" is in addition to the "Jan-Jul'42" modifier ? (for a total of -2)
No, they are referring to the early war contact modifier. Just -1 drm.
Located and Contact are two different things. Each Japanese force is 1) Located; 2) Approximately located (marker says "? Located"); or 3) Not located. This refers to the US player having intel on the location and course for the force. However, each force is still a speck in a big ocean. For an air strike to fly hundreds of miles on intel an hour old and find their target is non-trivial. That's why contact is not a sure thing, but having located the force recently does help the strike find its target.