It sounds like you have a solid plan already but I will try to offer some tips. Either you did not mention or I missed which difficulty you plan to play so I will assume tactician.
1) Keep in mind that your enemies and your allies will bleed (if not undead of course). If you go the undead route you could make use of a skill that allows you to create blood surfaces. However, once the build is up and running you could just simply attack to regain substantial health so it's definitely not required. Creating a blood surface would allow you to perform a clutch heal or heal when you cannot attack an enemy. And it's a very low investment skill so I don't see why I wouldn't use it personally (mostly because it's very useful in the worst situations).
Choose the race that best suits your characters theme IMHO. You will not struggle because of your race choice. I would only remind you that undead characters are damaged by healing spells from both allies and enemies. However, the up side is that if your enemies are using healing on you that's less healing available to your enemies. Just something to keep in mind, you will be fine no matter which race you choose.
2) Combat skills cap out at 10 (not including bonuses from gear). The leech from Necromancer increases at a linear 10% per level. As far as sustain the build is definitely viable but like any build it takes time and effort to reach that point.
3) IMHO Retribution will be wasted points with 1 or more allies by your side. You simply don't get hit enough to make the point investment worth it. If you play solo you can get a nice return when you are fighting 4+ enemies but even then it's usually split damage being returned (if you have say 2 physical and 2 magic enemies attacking you). If you have a character who can do both physical damage and magical damage you can take advantage of this but if you do purely physical damage the return is lower. You could argue that even solo there are better investments (and there are if you go strictly by the numbers). You will get a much better return by investing in your direct damage (and thus your self-healing) such as two-handed or even better Warfare. Keep in mind that two-handed damage increases additively and that Warfare damage increases multiplicatively (as denoted by the tooltips).
No, you will not heal from Retribution damage. Retribution caps out at 50% (not including gear bonuses).
4) There are multiple armor types like you mentioned and they each offer differing ratios of physical armor to magical armor. You can wear whichever armor you choose with no penalty but keep in mind the synergies with your Combat abilities and skills that you choose to use. For example, points into Geomancer will increase the amount of armor restored to your character via skills and potions (only your skills and potions mind you).
If, for example, you wear armor that is heavy on the physical armor, it may be prudent to have yourself or someone in the party buffing your magical armor which would be your weakness. The various status ailments and debuffs can only apply when your physical armor or magical armor is depleted. Sometimes this is ok, sometimes it means you get stunned/frozen/etc. to death. Plan accordingly.
Overpower would be useful for a heavy physical armor character. It is not the only skill available for this type of character either. There is a popular option in the Geomancy skill tree.
5) You seem to have thought your character through well enough that you could easily have a lot of fun and just adapt as you go. Play the game and have fun!