Question: How can Michael recognize Laurie as his younger sister since he wouldn't have seen her since she was only two years old?
Question: Matty introduces her friend as Mary Ann, but in the year book, the friend is actually Matty Tyler, and she is actually Mary Ann. Were both girls in on the scam? (00:31:22)
Answer: I noticed the problem of the introduction, also. It seemed like a major plot hole to me. There wasn't any material in the movie to support blackmail, etc by the real Matty. I hadn't thought of her possibly being in on the scam. If not, why wouldn't the real Matty have immediately blanched when hearing herself be introduced with the wrong name? So far, I agree with the OP's suggestion.
The real Maddy was at the house when Ned arrived. Presumably, she had already discovered what "Fake Maddy" was up to. It looked like Fake Maddy (Turner) gave the real Maddy a check, presumably a payoff to keep quiet. The real Maddy may or may not have known exactly what Fake Maddy was planning, but went along with being introduced as "Mary Ann." Also, the movie deliberately leaves details vague because it is a big plot twist at the end when Ned, and the audience, learns that Fake Maddy is really Mary Ann.
Answer: It appears that the real Matty Tyler was not initially in on the plan. It's confusing, and there're many plot holes, but it seems the fake "Matty" (Kathleen Turner) intended for the real Matty to eventually discover that her identity was being used (by Turner). The real Matty was then apparently blackmailing fake Matty to keep quiet. It appears that fake Matty intended to lure and then murder the real Matty, framing Ned Racine for her murder, as well as Edmund's. The real Matty's body was identified as being Edmond's wife through her dental records. Fake Matty probably intended for Ned to be killed in the explosion.
Question: How did Snake lose his eye?
Chosen answer: During a mission known as the "Leningrad Ruse." He and his flight squadron were sent unknowingly on a suicide mission. During it, his goggles cracked and let in a poisonous gas, paralyzing his iris. He has to wear the patch because his eye can't focus against bright light, causing pain. This is mentioned in the novelization.
Answer: There is a scene where Laurie dreams about meeting Michael as a young teen. It's unknown whether this is an actual memory of real events, but since nothing indicates otherwise, we could assume the he saw her at an older age when she looked closer to her 17-year-old self.