Does this mean I can make a commercial graphics program based on RasMol?
If what you mean by “commercial” is that you want to distribute binary versions and keep the source code as a secret, no, you may not do that, but if what you mean by “commercial” is that you wish to sell programs and services based on RasMol, that you certainly may do. Just remember that your new and wonderful program has to include or reference all the original source code and documentation, including the file NOTICE, which will allow other people to copy your program. In other words the rules for distributing copies of RasMol that you have taken advantage of will also apply to people who wish to make copes of your program. A lot of people find it easy to work within this framework, but if you need to do commerical development which does not fit the open source model, you may not make use of any substantial portion of the RasMol 2.7 series to develop your own product.