One does not bake UV’s. UV’s are the coordinates that are used for baking a texture map, ambient occlusion map in this case. The same way as one doesn’t bake a cake pan, you’re making a cake.
There’s overlapping UV’s because of double geometry, and because there are parts that use the same UV area. Remove doubles and move the overlapping UV’s temporarily. Select all, W -> remove doubles, and the latter is probably easiest by using UV island selection and select all visible islands, ctrl+i to invert selection, and move the extra with snapping on.
The modifier order is subdivision surface, then armature. That’s usually the wrong order because armature acts on the subdivided model and is slow.
The UV islands don’t have a consistent scale. The body has much less texture density than the other parts, and is likely to show up when you put details on those. They’re also harder to paint if you don’t paint on the model itself.