Jacket questions–sizing, underlining

My little guy doesn't currently have a winter coat, and I've been admiring this one since my first visits to O&S. So I'm doing it! Just bought the pattern. This will be my first proper coat (I made the Secret Agent trench coat last year, but it's not lined, and it was for a costume, so I didn't finish seams nicely or unpick a few puckers on the neck line). We live in southern Arizona, so I'm going with corduroy, lined with quilting cotton, since I don't have to worry about truly cold temps (we typically only have a day or two with daytime temps below freezing). However, I thought I'd underline with some nice diaper flannel I have in my stash. From what I've read, underlining the *lining*, rather than the jacket, is the way to go here. Opinions seem split on whether to underline the sleeves - does anyone have any thoughts on that, given the fabrics I'm planning? What about the hood? My guy is an average-sized kid, with the exception of his giant head (seriously - 97th percentile). I'd like the jacket to last him at least through the spring (which in Southern AZ means March), and I wouldn't complain if I could stretch it to next year. I'm thinking I'll make the 2T, but would that be ridiculously large on him this year? Would the 18-24m size likely be too small for an average 2.5 year old? And how generously sized is the hood - for reference, his head circumference at his one-year checkup was the size of an average 2-year-old's.