I decided not to size down the bodice and just see how things went knowing we would eventually grow into it if it turned out too large... If you want a snug fit I think I would size down the bodice portion of the Tilly and keep the same length.
As for the construction of the Tilly, I used the completely closed back and added a flutter sleeve. I was able to cut the bodice pieces and lining from the top of the shirt, the flutters from the sleeves, and then use the bottom portion of the shirt for my skirt! I just cut it off and gathered it up so this was a super fast project with NO HEMMING! Wohoo!!!
I see many more of these in my future. My daughter literally grabbed it off the sewing machine and slept in it that night! Happy dance!