From looking at the pattern, you should still slip your sleeve stitches to yarn since you work the body parts together first. Otherwise, you can just slip all the body stitches on your needles, do is as if to purl so you don't twist them.
For the sleeve stitches, use your tapestry needle as if it is a knitting needle and slip the stitches onto it and let the loops work their way down onto the yarn.
And yes, you put the fronts on the needle, too. At this point in the pattern, you're connecting the front and back and basically knitting down from the armpits to the hem. The sleeve stitches will be worked later. It would be difficult to work the body with the sleeves on needles since they'd get in the way. If you slip the sleeve stitches as I said above, you shouldn't have a problem. (When they're on the yarn, they look like they tighten up, but when you put the needle back in, you'll be ok.)