I think all your targets need to be declared up front. See page 269 PHB. Choose your attack (read attack power), choose your targets, then make attack rolls and so an and so forth.
An attack and an attack power are not necessarily the same thing.
Rain of blows is an
attack power that allows you to make multiple
attacks. If it were a single attack with multiple targets (e.g. a hypothetical close blast 3 attack power that targets "three enemies in blast"), then you'd be correct. In this case, though, the secondary attack is a new
attack, and therefore as part of Step 5 for the primary attack, you loop back up to Step 2 and start the process again for the secondary attack (Step 1 has already been determined).
You do however have to hit with both primary attacks in order to have two secondary attacks.
Right, I was just making sure you were aware that if you hit with one primary attack, you still get one secondary attack.
Since they're both secondary I believe they would both be resolved simultaneously as per resolving attacks on pg. 269 PHB so choose targets, then roll to hit, meaning that if you chose to use both of your secondary attacks on the same target, and the first one does enough damage to kill it the second one is essentially wated, as hits are resolved at the same time, then damage is resolved at the same time. Meaning you can't retarget if one attack would have been sufficient.
You've got the sequence a little bit messed up here. The secondary attacks are additional effects of the primary attacks, and so each one is resolved after the successful primary attack that triggered it. The book is, admittedly, somewhat vague on the order of operations for a power that allows multiple attacks (as opposed to a single attack against multiple targets), so I suppose a case could be made that the primary attacks are simultaneous, but even in that case you'd see the results of the primary attack
before deciding the target of the secondary attack. IMHO, though, since 4E doesn't really have a concept of actions occuring simultaneously, you're supposed to fully resolve one attack
before the second attack, including all secondary attacks. Meaning the only way you could screw yourself out of attacks with
rain of blows would be to kill the primary target with your first secondary attack.