Okay so thanks to the rapid responses from Rahkis I have been able to make ALLOT of progress on the jacket..I'm no longer having problems with the jacket clipping or stretching it flows perfectly, but now a new problem has risen and I didn't want to keep spamming Rahkis' inbox everytime I got stuck.
The new problem that has coming up is when im trying to actually copy the bone weight of the avatar to the jacket so I can finalise it to make sure it works for exporting. Somewhere along the line ive made a terrible mistake which I can only assume most experienced blender users will now laugh at me for explaining but here goes.
The first thing I immedietly did was manually create an armature on the jacket layer and applied vertex groups for each section of the jacket to each bone which in a result make the jacket move nicely with the bones. After that I tried to find out if there was a way to like merge the bones at all but I felt this was wrong, I dont know...so i ended up removing the armature and since i now knew about vertex grouping I actually thought grouping the jacket to the avatar bones might help. A few more problems then rose which for a few moments i thought I had fixed when the mesh was actually moving faster than the armature itself, I parented the jacket and at first in its default position it suddenly worked like a charm. Naturally as a newbie to the programme I got dead excited and really chuffed with myself thinking I had cracked it.
Yeeeeah, so much for that. I've been at it all day and alot of things have happened so I cannot remember the exact details of what happened first but at present the position of the jackets arms are in their default down position in edit mode while having changed the pose mode position to that of the t-position. For some reason when I apply pose as rest pose the arms either drop back down into the jackets defaults mesh position or suddenly fly up like their cheering. The other thing which i mentioned earlier is when im trying to copy the bone weight of the avatar to the jacket it says 'more than 1 mesh has vertex weights, only select 1 mesh with weights, aborting' ...I tried unparenting the jacket from the armature and it just doesnt want to...the arms drop down into the jackets default pose but when i move the bones its STILL attached to the armature. Also the avatar mesh's arms are up in the air and only drop back down when unparenting.
I'm so damn confused I dont know what to do anymore and I just KNOW im doing something so wrong but i dont know...