Impulsion simply means to have rhythmic forward movement where the horse is moving from its hind legs (where the forward motion comes from) through his back.
Regarding the headset, here are a couple of my previous posts:
I would also encourage you teach him to stretch. Take the rein like you're asking for the headset, and squeeze and release and ask him to drop his nose down. You use the same aids as you would to get a headset, but when he drops his head down more past the point of his usual headset, release your hand forward as well to encourage him to take the bit and move his nose to the ground. This will take a while, but it's very worth it. Eventually you want to be able to get him to trot forward with his nose practically on the ground while you ride on the buckle.
That brings me to my next point: if your horse is losing impulsion when you ask him in a frame through your transitions, then something isn't right. Forget about the headset for a few minutes and just make him trot forwards. impulsion should come before headset, and the horse shouldn't lose impulsion while in a headset, so take him back to square one - just get him moving forwards. Once he's been moving forward for a few laps around the ring, slowly ask him to come to a frame, and ask him to keep the same impulsion while you're doing this. Take impulsion over the headset.
Once he's holding the headset and impulsion at the same time, take a sitting trot - remember, the trot-walk transition should come fom the seat. Your sitting trot (when asking to walk) should indicate to him that this is your way of saying "yellow light - watch for the red!" and then sit deep in your seat and ask for a walk. Once your horse starts walking, DON'T QUIT RIDING! As SOON as he takes his first walk step, move him into a nice working walk.
The same is for the walk-trot transition. Get your horse walking comfortably in the frame, then give a check-give with your rein, indicating that something's going to happen, then ask him into a trot with your legs. Don't change your hands, seat or leg while doing this - if your horse is putting its head up, that tells me that you may be losing contact while asking for the change of gait. Once he starts trotting, then make him work forwards RIGHT OFF THE BAT - don't let his trot to get choppy. Don't worry about the head - if it pops up for a few strides, fine. At least he's working forwards. Once he's okay with working forwards from the transition, then you can re-introduce the frame.
You want her to be supple, so working on lots of bending exercises will certianly help - serpentines, circles, figure eights, spirals (going from a 20m circle to a 10m then back out to a 20m), counterbending, etc to get the horse to bend and work around your legs.
Don't ignore your walk either, make sure she WORKS in the walk (too many people forget about this gait because it's "easy") so don't let her die into a walk from the trot or canter... make her have a good solid 1-2-3-4-1-2-3-4 walk, where you're marching to get somewhere rather than moseying along. All this should be done while holding a long and low frame (for a young horse)
In the trot I like to see impulsion from behind while working up and through a nice long and low frame (think Hunt Seat) where the horse is learning to come back on its hind end and not leaning on its front end. I want to see it working through its back to have a nice elastic trot.
In the canter, the horse should hold the frame again, and have a balanced 3-beat canter. NO LOPING. He should be working into the bridle and balanced on its hind end. The canter should be rhythmic and not rushy. If the horse is rushy, circles will help.