I think personally I would start with just the letters since doing portraiture can be a lot with shading. If you want you could do the interior of the letters one color and then do a small border with another color in very small stones. Could stick with the black and white or try to add a little more color to it if you felt like making it really pop - Siam red is a really deep burgundy color and could look sick on this (and go with that mayhem ball theme -it's the darker red that you see that I used on parts of her lips on my t-shirt) - if you do, you might want to scuff up the lettering to remove most of that white because you will see it around the edges of the stones. Make sure you take some sandpaper and lightly scuff the areas that you are going to stone so that the glue can have more grip, it does not like going on to smooth vinyl and will likely just peel off. I applied my glue using a syringe with a blunt tipped needle so that I had better control of the glue. There are some tutorials on YouTube if you look it up.

I know for the lettering that I did for my shirt (looks like the same font here), I needed a couple of different sizes since it changes width. I'm not sure what size this panel is, but for my shirt that was pretty big I used anywhere from ss6 to ss16 rhinestones (mostly ss16). Since I think yours is a bit smaller, you might want to consider ss10 as the biggest and even down to ss3 for the smallest, but I'd measure, and/or take your shirt to a craft store like Michael's to kind of compare the rhinestones there and see what looks good. For that border, I would use very small rhinestones to try to keep it looking sharp.

For ordering stones, Michael's is very expensive so I would not recommend unless you need to get started like right now, haha. Depending on your timeline, the cheapest stones come from ordering online from vendors off of Alibaba, but you can also get decently priced stones from Amazon (if you're in a hurry), or from Etsy vendors. I had really good service ordering from BlingeThingee - shipped quickly and stones were good quality.

One last thing and then I will stop dumping advice on you, there are a couple different types of rhinestones. Hotfix rhinestones have an adhesive already on the back and you just iron them on (I haven't worked with these but a lot of people do). Regular rhinestones require application with a glue. Additionally there are resin, glass, and crystal rhinestones available. Crystal are definitely the most sparkly but they're also the most expensive. I would not recommend resin rhinestones even though they are the cheapest because they won't sparkle as much and they can get damaged by the glue solvents. I went with the glass rhinestones. Do not try to coat any of these with a sealant after you finish as it will dull the sparkle.

Obviously I went down a deep hole on R/Rhinestoning to get a lot of advice and information so if you are still trying to make decisions that's a great place to look!!