I'm a ftm and planning on a mix of cloth and disposable diapers. My parents did cloth diapers for me and my siblings, and even though the onset cost is higher, it is effectively cheeper than doing disposables. My mom told me that her rull of thumb was cloth at home, disposables when traveling (so that she didnt have to lug stinky diapers all over the place).
With my sister she had to do cloth all the time because my sister would get horrible rashes from the disposables :(
Good luck with whatever you decide to use. Its mostly a personal preference, and no matter which you decide is better I think its a good idea to have at least one package of the other in storage just in caseof emergencies :)
Newborns don't have the coordination to control their limbs. Swaddling is like the womb where everything is snug- I think it just helped my babies be more comfortable & sleep better. Also it gave me reassurance they were warm, that they didn't push a blanket off when I wasn't looking. As far as cloth diapers, I love the idea of saving $$ and the environment but I choose to pick my battles. My life is crazy enough without having to worry about cloth diapers. I'm all about simplify. ;)
I used disposable diapers with my son and I'll be using cloth diapers for baby #2. At first I didn't think it was for me and after some research I've decided to give a good honest try. For starters it will save me a ton of money. It will cost me around $500 to diaper my child until she's potty trained. That's a few months worth of diapers and that's about it. So children will develop painful chemical burns from the awful chemicals in disposable diapers and parents think it's just a diaper rash leading them to add even more awful stuff on their babies skin (I've used them myself not knowing better). So I'll have to do a couple of extra loads a week it's still cheaper, better for my baby and the environment. But it is a personal decision one I'm happy to be making as a second time mom :)
I swaddled my first two but they both fought and pulled their arms right out. So they were more in a semi swaddle. They were both winter babies, so it more gave me peace of mind that they were warm enough, but I don't think it made a difference with sleep.
As for cloth diapers, I have never tried it, but personally for me I think I will stick to disposable.
I swaddled both of my kids. They are used to being snugged up really tight for all those months. I noticed when my boys weren't swaddled, if they moved their arms or legs, it sometimes startled them because they could have been dosing off. Then they would start to cry until they got picked up or swaddled. They have the hand covers that prevent them from scratching their faces but they always fell off their hands. Swaddling will help keep their hands away from their face...
I didn't cloth diaper with them. But, I have thought about looking into it if/when we have another baby. Maybe someone can help you with that.