Christmas week the crowds are the busiest of any time of the year. On a scale of 1-10, Christmas week is rated 10 (July and August are around 8-9).
There are more EMHs though and the parks are generally open much later than normal, so you can plan to miss the crowds
With you arriving on the 16th you will get at least a week of fairly low crowds (rated 5-6).
As for clothes - you need to pack layers. So whatever the weather you can add or remove layers as required.
You will need jeans for the early mornings and evenings. If the sun is out you will be able to wear shorts during the day. Again for early mornings and evenings a light jacket or sweatshirt/hoodie will be required.
MVMCP tickets usually go on sale around the summer time (I think??). Its best to book early because they do sell out. Keep an eye on the DIS for the anouncement for when tickets are on sale. Usually there is a dedicated thread on the US Theme Parks Attractions and Strategies Board - here's a link to last years thread:
http://www.disboards.com/showthread.php?t=752567&highlight=MVMCP
To book you MVMCP tickets call 407-W Disney (00 1 407-934-7639)
Some more infor on the DIS:
http://www.wdwinfo.com/holidays/mvmcp.htm
For the Candlelight Processional you can just line up at one of the evening shows - you will need to start queuing at least an hour before the show though to get a seat.
The other option is to book a CP Package. For this you get a meal at a selected Epcot restaurant and a ticket for the reserved seating area in the theatre. You still need to line up about 30-40 minutes before the show though, but you are guarenteed as seat. Prices depend on the restaurant you pick. We found it best to see the show first and then eat after, but you can do it the other way round.
You book the package via the standard WDW Dine number:
00 1 407-939-3463
Link to last years information:
http://www.wdwinfo.com/holidays/candlelight_processional.htm#hm-xmas-candlelight