To see the whole context of where I got the step 5 and 6 from, type "To Set the Properties of the Project Sheet Set" in the search box of the help file. You should see the exact same text as one of the options in the top left of the results.
"Where do i click the setting for page setup override files?"
On the sheet tab of project navigator, all the way at the top of the hierarchy, right click the icon of the rolled up sheets and choose properties. If you don't see the icon, click the rolled up sheet icon on the top right to view the sheet set in a sheet set view and not an explorer view.
In the sheet set section of the properties dialog box you will see where you can chose the path to the page set up override file.
I thought this is the point you were seeing that the path was grayed out. I was thinking that it was grayed out because the file you have chosen for your page set up override did not have a "named paper space layout" or their plot areas have not been set to Layout like the note says in step 6.