I have twin girls who just turned three and I made them both 16" friendship dolls, I now wish I had made them in the 12" range. My girls are tall but the scale and size of the 16" is still much to large for them, it's like 1/2 as tall as they are.
They do like to put on and off clothing so I did not stich anything down, but if your child isn't ready for that you can always make a traditonal doll with clothes and whip stitch it closed until they are ready, that way the doll can be cherished for many years and grow with the child.
My girls also like to play with the hair, so I do a crocheted cap but I put braids in it to keep is tidy, for their's I did a half up half down.
They do love them and play with them every day and are really quiet good to them considering I think they are a little on the young side to have this kind of doll. I think it has a lot to do with the way I treat their doll's and model how to take good care of them.
Best of luck and happy doll making.