"It seemed a bit loose and he said well he'll (ds) will hold it down when he's sitting in it"
That's AWFUL! Totally incorrect. Your child's weight won't hold the seat down if you're involved in an impact. Which is exactly where it matters. I hope you didn't buy it.
OP to answer your questions:
You can definitely buy Group 1 (second stage, 1-4 years about) car seats for cheaper than £200. It's not necessary to spend so much. You should be careful about seats which seem TOO cheap, though, as some of them are not as safe as others. The cheapest trustworthy seat is the Britax Prince which you can normally pick up for about £60 somewhere on sale.
As others have said, your son might fit into his baby seat for a little while longer yet. They can fit into the seat until either the top of his head reaches the seat shell or they reach the weight limit of the seat, which should be printed in the manual or on the underside of the seat and is usually 13kg. It doesn't matter if his feet dangle off the end as babies tend to move their legs around in the car, cross them, kick them, etc anyway. He can rest them on the back of the car seat. If he's getting a bit snug in the seat itself you can try removing any padding which is designed to be removed such as a newborn head support and try not to dress him in bulky clothes when you're going in the car - which you should be avoiding anyway as it can make the straps less tight than they need to be.
If/when he does outgrow the baby seat, the seat you described is not an i-size seat so there is no requirement to rear face until 15 months. However since rear facing is so much safer, it's recommended that you do rear face for as long as possible. If you want to stay rear facing you have two options. You can look for a combination Group 0+1 seat like the Britax First Class (which is normally about £100 somewhere), which will take you rear facing up to 13kg, but can also be used forward facing right up to 18kg (about 4 years) or you can look for an extended rear facing seat which usually allows rear facing for the whole 4 year period. Some of them also turn forward facing if you prefer.
If you look for a Group 0+1 then be careful because some of the cheaper models only rear face until 9kg or 10kg which effectively makes them pointless for this purpose.
For two cars. You'll have to work out whether it's feasible to move the car seat between your cars or whether it's worth it to just buy two. Presumably you're able to move the seat now. I think that the Mothercare assistant's words were pretty unhelpful as LOTS of people move car seats between cars. Any car seat can be moved, so his joke about weight is really unnecessary. With the larger rear facing seats it's sometimes necessary to install tether straps so you can buy two sets of straps, but one seat which reduces time when swapping over. One thing you'll need to be aware of is that not all car seats fit all cars, so you will need to test your chosen seat in both if you want to move it regularly.
There are a couple of options which can make regular moving of car seats easier. You could go for isofix seats which click in rather than being fitted with the seatbelt. To properly fit a forward facing Group 1 seat with a seatbelt you should actually be kneeling in the seat and pushing your full weight into it to tighten the seatbelt to get it tight with each step. That's a bit of a pain to do each time. You could also look at car seats which use a base and purchase two bases but one seat. Some of the bases are seatbelt fitted, if you don't have isofix.
Lastly the solution I went for as a non driver was to buy one of the seats which use an impact shield instead of a harness. I had the Kiddy Infinity which is an older model now but I found this extremely fast and convenient to swap between cars as it plugs in almost like a booster seat. It was also intuituve for grandparents etc which complicated seatbelt fitting might not have been. These seats also tend to be much lighter than others on the market.
When other people give you/your child a lift they'll need to have a car seat suitable for him. So either they borrow your seat or they might have their own seat, for example if they have another child who isn't currently in the car, and once children are in boosters, it isn't a big deal to have one of the £10 basic boosters lying around. I don't think that you need to worry overly about somebody offering to pick up your child from childcare on a whim, because you won't be allowed to do that anyway. Safeguarding procedures mean that children have to be picked up by a person known to the nursery/school/other childcare unless arranged in advance and you let them know about it. In which case, you also have time to arrange a child seat.
If you go on holiday, people normally either hire a car seat, take theirs on the plane (many airlines carry them for free, even Ryanair does) or just wing it when they get there as other countries have different car seat laws anyway. This stage is the one with the bulkiest, most inconvenient car seats for travelling unfortunately but you're not quite in it yet and it won't be forever.
Hope this helps - feel free to ask for more detail on anything.