Hey Araph, welcome to the group, and don't worry about your noobishness, I've been there too. I'll let you start at level one if you want... however, the starting level is now level 2 (I think I forgot to put that in the OP) and starting gold is now 550 gp (I'm aware that's well below the recommended wealth for a level 2 character, but the campaign has been a tad low on decent loot thus far... something that I fully intend to fix relatively soon). If you start at level 1 (with only 100 gp), you'll be way behind the power curve of the rest of the party, and there's a good chance you'll feel left out of the combat.
As for your sheet, RAM's taken a pretty good look at it: you've still got a bunch of stuff to fill in, but you've got a good start. And yes, you pick a school to specialize in at level 1. You're able to change it later when you level up if you choose to, but you'll be much better off if you pick what you want to do as soon as possible and stick with it. Specializing in general isn't really too much of a good or too much of a bad idea; it really depends on what you're trying to do with your character. If you want to give up the ability to spread plague and compel others to do your bidding FOR you in exchange for more and better self-defense magic, then that's your choice all the way. Specializing in a school of magic tends to make for some good roleplaying, too.
The Kelgore's Fire Bolt spell is fine with me, although it's a bit of a misnomer, from the description. (more like Kelgore's fiery orb)
And I *finally* got through the magical crossbreeding book. It looks fine to me, with an exception and a note. The exception is that, on a failed check, I think I'll make the consequences harsher on the subject, like reducing the resultant creature's con score by the amount of the failure squared (fail by 4? Lose 16 con). Imagine, if you will, the consequences of the veins leading into your heart being 1cm off. Also, this practice will draw your alignment slowly towards chaotic evil (for long-story-short murdering something in a torturous, highly unnatural way, subjugating the will of another creature, etc. etc... the exception is if you use it on someone who is threatening society at large, or if they're a willing volunteer).