Good question and ideas here! Sounds like you're asking/proposing a couple things here...in response:
1) Yes, that's correct: we're looking to you to respond to and apply the concepts presented in the lecture to your own idea(s)....and not simply repeat the lecture.
2) Yes, ideally, it would be great if you could build on one of your idea. We hope the blogs will help set the groundwork for your final project (to be posted very soon).
That said, we understand that you may change your idea(s) as you begin blogging...and the blogging assignment (aside from giving us a sense of what you're taking away from the lectures) will help us get a sense of who you are and how you work...
3) On that note, collaborating on a project is an excellent idea! However, it is a short lab and this may not always be possible to coordinate. So, when you're blogging about your project think about the ways in which your project could be worked on as a team and possibly encourage collaboration...
Hope this helps answers your questions & I look forward to reading more about your ideas! :)