Yes, what I am suggesting is to transition to milk in the bottle first, then transition to the sippy cup, somewhere around 12-14 months. The change from formula to milk is enough of a change, why throw another big change (the cup) into the equation? The transition to the sippy can be very easy, or very hard. Do a quick search for this topic and you will this subject pop up all over the place. Young toddlers often just don't want to give up the bottle. Others (like my DD1) couldn't care less. Don't forget that it also takes some time to learn how to use the sippy cup, and you may have to experiment with several different kinds before you find one that your LO likes best.
Don't worry if he is not quite ready to make the change at exactly 12 months. That is just the standardized age everyone uses to say wean off the bottle. It often takes weeks or a few months more. The issue is not a bottle versus sippy cup, both are merely vehicles to carry the liquid. The issue is that some LO's walk around nursing their bottles (which they often carry themselves) at their own pace for hours on end, overnight etc, and this presents an issue for dental health.
To answer your last question, I am in the U.S. and we don't sterilize the bottles. I just use bottled water in lieu of tap water, but that is not even really necessary. I continued on with that until I ditched the bottle at 13 months.