When you're thinking about things, understand that decimal expansions are good examples of Cauchy sequences. This justifies writing
$$
\sqrt{2} = 1.414213562373....
$$
This is really a sequence of numbers whose square gets closer and closer to $2$. That is, in your context,
$$
\sqrt{2} = [\{ 1, 1.4, 1.41, 1.414, 1.4142, 1.41421, \cdots\}]
$$
The square of this sequence is another Cauchy sequence that is equivalent to the constant sequence $[\{2,2,2,2,2,\cdots\}]$ because the following difference sequence tends to $0$:
$$
\{2-1^{1},2-(1.4)^{2},2-(1.41)^{2},2-(1.414)^{2},\cdots\}
$$
Using these definitions, there are multiple ways to express the number $1$:
$$
1 = [\{1,1,1,\cdots\}]=[\{0.9,0.99,0.999,0.9999,\cdots\}] = 0.999999\cdots
$$
To remove the ambiguity, you're lumping together all Cauchy sequences whose differences have an actual limit of $0$. That's what the equivalence relation is all about. An equivalence class $[\{ x_{n}\}]$ consists of all Cauchy sequences $\{ y_{n}\}$ such that $\{ x_{n}-y_{n}\}$ has a limit of $0$.
The first thing you have to do is show that you can add these equivalence classes of Cauchy sequences. This is done by taking one Cauchy sequence from $x=[\{ x_{n}\}]$ and another from $y=[\{ y_{n}\}]$ and showing that (a) $\{ x_{n}+y_{n}\}$ is Cauchy sequence, and (b) no matter what one you choose from $x$ and what you one you choose from $y$, you always get a Cauchy sequence which is equivalent to the first one $\{ x_{n}+y_{n}\}$. In other words, $\{ x_{n} \} \sim \{ x_{n}'\}$ and $\{ y_{n}\} \sim \{ y_{n}'\}$ implies $\{ x_{n}+y_{n} \} \sim \{ x_{n}'+y_{n}'\}$. Then you have a good definition for $x+y=[\{x_{n}+y_{n}\}]$ that doesn't depend on what members $\{ x_{n}\}\in x$ and $\{ y_{n}\}\in y$ of the equivalence classes $x$ and $y$ that you use.
A couple of things you'll need to be able to show: The sum of two Cauchy sequences is also a Cauchy sequence. And, a Cauchy sequence is bounded. Most everything else is just slogging through the details.