How do these percentages explain why the democrats adopted several populist planks and nominated the populist candidate as their own nominee in 1896?

The reason for why is very simple: they believed it would increase their chance of wining. This is a common practice in the US politics and why the two main parties are well the only important parties in the US today. It is because they adapt and incorporate the beliefs of minor parties that appear and they address the issues raised by the new parties.