Not to burst your bubble, but...
You iguana is a foot long total, right?
And the plan for the enclosure is 2.5' by 3.5' right?
How tall is it going to be?
This leaves the animal a foot to turn, and two feet to stretch.
Now imagine yourself living in a walk-in closet for a year, where you do everyhing from pooping to eating to drinking and basking... all in a small contained area.
If possible, try to AT LEAST increase the measurements by a foot EACH, and make the enclosure as tall as possible.
Onto the other issue:
Silicone-syringes (usually found at Home Depot and the like) that dry fast and stay dry despite moisture should work fine.
As for further protecting the wood, you can try polyurethane (such as MiniWax's), but do let it dry through, and leave it in fresh circulating air 'til the fumes disappear. It comes as either spray-on, or liquid to brush on. Either is fine, the former being cheap and easy, and quick.
Swimming pools sound fun and cool, but careful:
One, they can be an electric hazard. So make it safe.
Two, they can create huge messes.
Three, the iguana can drink the water... soak in the water... take a $#!t in the water... add it all together... it ain't pretty.
But they do help keep humidity. So think about it first... and if you are going to have a mini pool, then you definately got to icrease the enclosure size.
You plan sounds great, I just think you can apply it to a much larger enclosure that you can use on a longer term, which will be especially beneficial to the iguana. Remember, you may think it will look and be great, but it's the iguana who will be living in it, hehe.
-IJ