I completed the FWS as a Quilt-Along along with several other ladies here on the QB
... see post #203 for my completed FWS ... and the many others posts show others results
http://www.quiltingboard.com/blocks-...148904-21.html
Mine had 144 different fabrics which came from my stash. Usually I looked at each block and decided what fabrics to use. As I went along, I would look at the blocks on my design wall and determine if I needed more blue or red or whatever. So yes, somewhat a controlled scrappy. I did not choose my sashing/cornerstones til I got near the end, and then auditioned different possibilities.
I see no reason why you could not do it the way you were suggesting! Could be a fun way to do your quilt and truly keep it scrappy.
As for keeping a journal, I did not, though I know some have done so. I am not a journal or diary keeper, so that's just me! Your FWS book would be a perfect place for the notes, jotted on the pages. At the least, you might enjoy reading back thru it at a later time. YOur notes might be as you have suggested above ... or what memories each block has brought to your mind. Perhaps family lore and history back thru the generations?
I fully enjoyed the journey ... and that was enough to convince me to continue with the Pony Club quilt, by the same author/designer. I did much the same for the fabric choices, though in this one, I chose a fabric that is used in every block, mixing with 147 other fabrics! I did purchase more for this one, as I used a lot of novelty prints and did a lot of fussy cut work. I did not keep to the pony theme ... though did keep with a rural/farm theme. Early on I chose my sashing/cornerstones and have had no regrets as to their choice.
Hope this helps ... and hope you enjoy your journey doing the FWS too!