Direct numerical simulation (DNS) has become a powerful tool in studying fundamental phenomena of laminar-turbulent transition of high-speed boundary layers. Previous DNS studies of supersonic and hypersonic boundary layer transition have been limited to perfect-gas flow over flat-plate boundary layers without shock waves. For hypersonic boundary layers over realistic blunt bodies, DNS studies of transition need to consider the effects of bow shocks, entropy layers, surface curvature, and finite-rate chemistry. It is necessary that numerical methods for such studies are robust and high-order accurate both in resolving wide ranges of flow time and length scales and in resolving the interaction between the bow shocks and flow disturbance waves. This paper presents a new high-order shock-fitting finite-difference method for the DNS of the stability and transition of hypersonic boundary layers over blunt bodies with strong bow shocks and with (or without) thermo-chemical nonequilibrium. The proposed method includes a set of new upwind high-order finite-difference schemes which are stable and are less dissipative than a straightforward upwind scheme using an upwind-bias grid stencil, a high-order shock-fitting formulation, and third-order semi-implicit Runge-Kutta schemes for temporal discretization of stiff reacting flow equations. The accuracy and stability of the new schemes are validated by numerical experiments of the linear wave equation and nonlinear Navier-Stokes equations. The algorithm is then applied to the DNS of the receptivity of hypersonic boundary layers over a parabolic leading edge to freestream acoustic disturbances.