As for the route your Doc may take you it should be discussed between the two of you. I personally can't give much input there as to the dr's approach.
Definitely do Both!
Muscle is going to help jump up your metabolism and help burn fat faster. Look up the benefits of weight training for fat loss, there's a lot of info out there on the subject and different ways to approach weight training that you can experiment with until u find what u like the best.
Diet is easier to put on track than one may think, look around and check out other people's diet and design something for yourself that you know you can stick to. Of course it would be best to get a professional to help out.
If you look around you'll see plenty of foods that keep popping up, like tuna, chicken breast, leafy greens, almonds, eggs, whole wheat stuff, oatmeal. There are also lots of vegetarians here on AM and great articles out there to learn from.
There's no one way, just have to kind of keep tweaking and adjusting to see what you respond to best.