Molting is the process birds go through of replacing worn out feathers with new ones. Since feathers represent a 10th to a 12th of the body weight of many species, the process of replacing them consumes a great deal of energy. This is not true of all birds, however. Females also yellow up, but not as brightly as the boys. In the fall they go through another gradual molt to put on their winter coat - which presumably blends in with the dull colors of the season.
Warblers go through similar changes.
Losing feathers on the head and body is not too critical in the summer, when the weather is warm, and thus it probably does no harm for a bird to look like the one Carolyn described. However, so many lost feathers may indicate the bird is not in perfect health, and is having trouble replacing them. It is important that birds not lose their flight feathers, for this would make them easy prey for predators. The process of replacing flight feathers is more systematic. Most songbirds, notes biologist Steven W. Kress, molt one primary feather at a time on each wing.