Making your own pattern from an existing dress is a great way to do it. However when you buy a pre-made pattern from someone like vogue or butterick will have instructions as to how to lay pattern on fabric and also how much fabric you need. Where you purchase your fabric is a personal choice, however make friends with your local fabric shop. Usually there is one or more dressmakers who work there and can give you good advice and help. Whether to hand sew or use a machine is up to you, personally machine sewing is great but I have a greater sense of achievement from hand sewing. The other thing is know your material, I recently bought some which if the pattern wasn't laid the same way round would end ur looking like I was using completely different colour, which would have ruined my dress completely. The last thing is don't try to go as a beginner keep things simple. Oh and make sure u have enough material. Rather have loads left over than find you don't have enough and have to get more or worse substitute with contrasting or the closest you can find. As for cotton match it as close to the fabric colour as possible so as your stitches are as hidden as possible, unless contrasting stitches are a deliberate part of your design.