My ds was 19 months old when we went to
Disneyland for the first time last summer. He wasn't freaked out by anyone, although a lot of the characters that were in full costume, he wouldn't stand next to them for a picture unless I was with him. He got better though after a couple of days in the parks.
As for getting him familiar with the characters, I would just watch Disney movies with him. My ds was most familiar with Buzz and Woody, from Toy Story. The look of utter amazement on ds' face when we "ran into" Woody, walking around Frontierland is a classic. And ds would not give up on Buzz' autograph. It took us an hour, and we had to chase Buzz all over Tomorrowland in the end, but we got it. Ds only spoke about 10 words at the time, and when I would suggest we come back later for Buzz, he would just say "Buzz! Buzz!" Don't panic if he isn't sure. Offer to hold him, and have a the Cast Member take the picture. They are all willing to do that. Ds had no idea who JoJo and Goliath were, from JoJo's Circus on the Disney Channel. But he gave JoJo a big kiss and hug. From that moment on, he always knew who JoJo is!
They do have autograph books in the parks. They sell 2 or 3 different kinds. There is one that has just the pages, and there is one or two that have a plastic envelope on one page for a picture, with the opposite page being blank for an autograph. I got my each of my two kids an autograph book, and it still is one of their favorite things. If you'd rather have one ahead of time, you can go to any craft store or scrapbook store, and just pick up a 7 x 7 album. You don't have to decorate it ahead of time. Just get the autographs, and you can incorporate pictures into it later.