Mark waistline with chalk or WS pen..clean finish the skirt edge.Sew the skirt on right side to right side with the skirt turned up, so that the seam is hidden under the skirt. Then "top" stitch to keep the skirt down Use either a stretch stitch or a zig-zag so it will stretch when you are putting it on the baby for both seams.
If you cut into the onesie, you are shortening the girth, so unless you use a longer one, it might be too short.

eBay Store - Patterns by Parksbird: FREE ONESIE DRESS Pattern

Copy and paste the above in your search engine and check out the complete free instructions on making the onesie dress.
Have fun sewing.

Hugs

Here is free step by step instructions with pictures of how to do it http://lynniepinnie.com/onesie_dress_tutorial/onesie_dress_tut.htm

Not the best--but you'll get the idea. Awhile back someone posted a really good tutorial, but I can't find it now. And welcome to Cute!