Alot of locales require you to bring the whole house up to the current building code when you add significantly to the house. I don't know about his sequence though. Are you planning to stay in the house during the renovations? If yes, then it makes sense that you have a finished living space to live in during the construction.
Since you will be speaking to at least 5 or 6 contractors, you should get a consenus of methodology from them. Your architect should be able to give some guidance in this. Whether the job is too big for any given contractor will depend on his previous experience. A job this large requires a good deal of subcontractors. Does he have those in place already or will he run around trying to round up warm bodies? Certain aspects of the job will be, "in house". These are guys who work for him full time. Others will/might be subbed out. Find out what aspects will be handled by others.
There are a slew of other issues that will need to be addressed. There are construction consultants that will liason with you and the contractor, or just guide you through the process if you need them at all.
Ron

This is a very complicated remodel process. For one, I would never suggest that a homeowner live in the house during such a project, considering the discomfort and safety issues. In such a project the first order of business would be the demolition of the roof and old wiring going over the ceiling to the first floor.(which essentially would make the house unlivable) Removal and replacement of window and door headers would also be required. Getting the second floor deck on would be the highest priority to keep water from getting into the existing.

I'd find someone who can show they've done one of these projects or a project of similar complexity.

Also, Ron's comment about subs is on target. Any contractor who claims he has a 'crew' of hired professionals on his staff is blowing hot air. Most all contractors use subcontractors for most trades, even down to demolition. The cost for hired labor is enormous. Any good contractor should have positive relationships with a variety of subs in all the trades that he/she should have walking through the house and meeting with you as well during the bid process.

You should also have plans of what you want, and an assessment from an engineer on the structural viability of the project, either from the contractor or obtained on your own. Expect to pay some good money for a set of plans worked out with you. The designer/architect can recommend an engineer to review the plans and make recommendations to ensure the structural integrity of the framing plans.