I'm betting you'll need to gather the sleeves a bit from the center top about an inch or two in each direction. I usually do those sleeves as set in type. Does the collar have just the two pieces or are there still 4? Yep, I do believe a zipper goes in there. I've made dresses just like this one...they really are very cute when they're finished. Maybe you can get your little darling a special baby doll to wear it when its done
P.S. The pattern I use has 4 pieces for the collar, wrong sides together sew 2 pieces together around the curved edge leaving the top notched edge open, clip the curves, turn and press. Match the notches on the collar to the dress, baste, flip the collar, then stitch bias strip over the raw edges for a nice flat seam. Make sense?