I myself like to over-do things a little bit. For example, in the footing of the cabin I'm building, I chose to put in three courses of 5/8" rebar and pour 5000psi concrete, but in Tennessee two courses of 1/2" rebar are all that's required for a residential footing. I chose to do that because I was thinking "I only get to do this once", and the cost difference between the thicker rebar and an extra course wasn't much. Having said all that, I'm pretty sure 3/8" rebar is sufficient to secure your logs, but if it were my cabin, I would pay the extra few dollars and use 1/2" rebar. I would also drill pilot holes for the entire length of rebar. It's gonna be a bear of a job to pound rebar through a log without one, if it will even go at all and not split the log. The 2 foot spacing sounds right, I believe that's how far apart the fasteners in my logs are.
While on the subject of tying logs together, I chatted with a guy who has 30 years under his belt of building log homes, and he was telling me about how things were built when he started and what's changed over the years. Rebar in logs is one of them. He used to use rebar, but some time ago timber screws came on the market, that's all he uses now and those are what's tying the logs together in my home. One brand of these types of fasteners is Timberlok. With these, there's no predrilling pilot holes and there's no swinging a 5lb sledge hammer either :) I've included a picture below of what these screws look like.
As far as the inside corners go, either way you describe can work. I think flattening one log for the other to butt against might be easier than using a saw to cope a radius on the end of a log to neatly mate with the other one in the corner. I don't think either way is wrong, it just depends on the appearance that you want.
I hope all this helps!