I am going to tie the two black wires from the cross bucks together which will go to one side of the 18VAC. The center wire from the switch will go to the other side of the 18VAC. Is this correct? Also , should they go to the 18VAC or the 12VAC? Thanks in advance.
It appears that you have two crossbucks with lights that will alternate blinking with the SPDT switch. Yes, your attaching the two wires together as you state will work. As far as using 12 or 18 VAC, without knowing what bulbs are in your crossbucks, it would be impossible to answer. 12 VAC may even be too high or the manufacturer may recommend a dropping resistor in the circuit.
Yes, assuming you want the outside lamps when the switch is thrown one way and the inside lamps when thrown the other way.
That would depend on the rating of the light bulbs. I always run my bulbs at a little lower voltage than the specified value. If they are rated at 18V and are sufficiently bright at 12V you can run them at 12V. They will last much longer that way.
To avoid confusion, the centre wire (from the centre pole of your SPST switch should be red – not black – as it is the red wire connection to the power source.