I like your system. It would totally work if I read most of my books on an electronic device. I’m old-fashioned, I enjoy reading a physical book. There’s a certain tactile pleasure. There’s also the feeling that it is my book and it will stay with me forever, until I pass it on to my children or whomever. Where as an e-book feels ephemeral and impersonal.
And here lies the problem for me. I have this neurotic idea that writing in the book defiles it in some way. Maybe it’s some sort of fetishization, that I need to look into some day. I also feel the notes get in the way when rereading.
Anyhow, I like your system overall. I may simply modify to fit my “situation.” Maybe, I’ll annotate the book on a computer or tablet (paradoxically).