Yes, it needs to be rated for the maximum current.does the freewheel diode need to be rated for max current (18A) and 12v? Schottky's this size seem to dissipate a fair pit of power.
The only way to get a lower dissipation would to use a second MOSFET as a synchronous rectifier.
The ripple gets worse at lower duty cycles.When using PWM, is it best to do your cap and inductor calcs at 25% load, 50%, 75% load? I'm more concerned about efficiency at lower to mid settings (i.e. minimising ripple) as at 100% there will be no ripple...