Sequencing is used to determine how the distribution of the output changes when the mean and/or variability of the inputs change. Suppose you think the average of one of your inputs is 2.0, but you also know that the average could likely be between 1.75 and 2.25. Sequencing allows you to specify these as upper and lower limits of the average. The same with variability.
Steps then refers to the number of increments between the limits you specify. Suppose you specify limits of 1 and 2, then 5 steps means the values 1.0, 1.25, 1.50, 1.75, and 2.0 will be used by the simulator. Each combination of the steps in each of the input variables is then used to simulate the output(s).