Swatching: Part II

Ok, so I made a larger swatch for the top (here is a non-Rav link). This time, I cast on 64sts in the round and knit in the eyelet pattern. I got results 100% different from last time.

Now, rather than planning on knitting with a size 4 or 5 needle, it looks like I'll need to choose either the 2 or 3 needle.

With the larger swatch, I also found a new problem. I tried the swatch on my arm to see what a potential sleeve would look like. It seemed perfect, but then I checked the pattern's stitch count for the sleeve and it's not 64 sts. It's 80 sts. Which means that according to gauge, I'd have a sleeve almost 3" larger than my swatch!

Now I'm totally confused. The top is supposed to be knit with positive ease, and that is how I plan on knitting it. But with the positive ease I already had, plus the 3", I'd end up with about 4" positive ease on the sleeves!!!
That's not what I want at all.
I also checked the schematic again for the bust measurement and that will end up at 36", so I'd have 3" positive ease around the bust.

I'm almost 100% decided on the smaller needle, (size 2), because the gauge I got there was closer to 6.5 sts per inch and the "sleeve" measurement there seems like it can handle another 16sts.
I also have one more problem. The original top is knit with ribbing at the bottom that incorporates hip and waist shaping, but I'm modding that to eliminate the rib.

This is the waist look I'm going for.

My plan is to eliminate the ribbing and begin with a provisional cast on. I'd start the lace pattern right away. Then, after doing the bust increases (which would happen on the 1st or 2nd row) I'd knit up the entire sweater and then come back to the provisional cast on, work a row of "hip increases" to correspond with the bust increases (the prov cast on wouldn't have the increases included) knit a drawstring row, and then knit in the lace pattern until cast off time, where I would either do a picot cast off (by the by, do you think this would this would curl?) or a turned hem.

Now, here's the question. Should I just cast on including the bust increases and then ignore the increase row (which increases 48sts in one round by the way) the pattern specifies? It seems like the aforementioned way of knitting bust and hip increases on each side of the smaller cast on could have the potential to look odd...

Also, I think the drawstring would account for any "shaping" necessary.

I'm totally unsure what to do at this point...suggestions anyone?