The proof consists in connecting together two arguments. The first, covered by the exercise, reduces the problem of approximating the rotation gate $R_\hat{n}(\alpha)$ to the problem of approximating the rotation angle $\alpha$. The second, described in the quoted text from Nielsen & Chuang, shows that one can achieve arbitrarily fine approximations of all angles using a rotation by an irrational multiple of $\pi$.
Reducing gate approximation to angle approximation
From $(4.77)$ we have
$$
\lim_{\beta\to 0}E(R_\hat{n}(\alpha), R_\hat{n}(\alpha+\beta))=\lim_{\beta\to 0}|1 -\exp(i\beta/2)| = 0.
$$
In other words, for any sequence of angles $\gamma_k$ such that $\lim_{k\to\infty}\gamma_k=\alpha$, we have
$$
\lim_{k\to\infty}E(R_\hat{n}(\alpha), R_\hat{n}(\gamma_k)) = 0.
$$
This means that if we can apply a rotation around $\hat{n}$ by a angle that approximates the rotation angle $\alpha$ to arbitrary accuracy then we can approximate $R_\hat{n}(\alpha)$ to arbitrarily small error $E$.
Achieving arbitrarily fine approximations of all angles
Now, as shown in the quoted paragraph from Nielsen & Chuang, the set
$$
\Theta=\{\theta_k\,|\,\theta_k=(k\theta)\mod{2\pi}\},
$$
of angles of rotations around $\hat{n}$ attainable by $R_\hat{n}(\theta)^k$ for $k\in\mathbb{Z}$, fills up the interval $[0, 2\pi)$ in the sense that for any rotation angle $\alpha$ and any desired accuracy $\delta>0$ there exists $\tilde\theta\in\Theta$ such that $|\alpha - \tilde\theta|<\delta$. In other words, the set of attainable angles $\Theta$ contains arbitrarily fine approximations of all angles. In particular, $\Theta$ contains $\theta^*$ that approximates $\alpha$ to whatever accuracy is needed for $E(R_\hat{n}(\alpha), R_\hat{n}(\theta)^n)<\frac{\epsilon}{3}$.
Connecting the arguments
The connection between the two parts is as follows. The first argument proves the implication that if we can approximate the rotation angle $\alpha$ arbitrarily well then we can approximate $R_\hat{n}(\alpha)$ to arbitrarily small error $E$. The second argument establishes the premise for that implication, namely that we can indeed approximate the rotation angle $\alpha$ arbitrarily well using repeated applications of $R_\hat{n}(\theta)$, as long as $\theta$ is an irrational multiple of $\pi$.