Maybe it's just me, but I'd run far away from any (hand) knitted dress.
Hand knitting yarn is just generally kind of bulky, unless you're knitting with fingering weight, so in my head, knitted dresses would by default make anyone look bigger than they already are.
Also, wouldn't that be incredibly heavy? I'd imagine ending up with something with an unflattering drape to it -- something that by the end of the day, would droop significantly because of the weight of the yarn itself.
1) European needle sizes are often just numbered as the mm sizing. It's the same was in German and French patterns, a number 3 needle is a 3mm needle, and No. 4,5 would be a 4.5mm needle.
2) Since it says "increasing at the ends" (note the s on ends), I'd start the row, knit 3 stitches, increase, knit the rest of the pattern until the last 3 stitches, increase and knit the last 3 stitches. So you're increasing on BOTH edges every other row.
3) I'm also pretty sure that Adriafil gives only one schematic for the front/back pieces, though I haven't looked at a pattern in a while. If the picture shows that the bottom edge of the garment is say, 40cm, it means that when lying flat the garment is 40cm wide, so the total circumference would be ~80cm (+/- whatever the stretch the knitted fabric might have).
I don't own the book, but it sounds similar to building a pouch with a flat bottom. You bind off the stitches so that your cast off edge matches the cast on edge (and it gives it stability), then you use the yarn still attached to the bottom piece (at the bind off edge) to pick up stitches all around it. Then you typically continue knitting in the round, around all the sides of the bottom.
You want to end up with a typical raglan shaping of arm pieces/front/back, but on the seam that should be buttoned up, you pick up and knit button bands for about a centimetre or so between the front/arm seam.
Not exactly sure if the extra space would alter the fitting of it too much... But then again, I've seen many of these sweaters on people, where the buttons aren't exactly functional -- just sewn on top of the seam
Your mom is mostly right. If you're using the first/last page or your signature block as the endpapers, they will not reach the edges of the covers.
Lay the cover flat, and stand the textblock on it where it'll end up (so spine of the block on the spine of the cover). Then fold down the first and last page, mark where those reach on the covers -- that is where you want to glue your front/last page down. If you pull them all the way to the edge of the inside covers, the pages may tear if you try to open the book flat.
It's easier if you use endpages that are at least twice as long as your pages are wide... then they can reach all the way to the edge of the inside covers.
I hope that made sense, if not, just experiment with how you place your textblock onto the cover.