Welcome 2Panther!!
Lets me try to give a few tips:
I have very little woodworking skills but I hope to tackle this project anyway. My ability to follow directions is uncanny though haha so I hope to find a step by step guide to making this happen for my first cabinet and then after this one is finished I will try to get creative. If anyone has some step by step instructions for cutting out the panels I'd appreciate it!
There are 2 paths to go about fashioning a MAME upright cab:
A) Simply find a local arcade dealer or auction to find an old cabinet, gut the internals and rebuild into a MAME cab.
or...
B) The standard way to build an upright from scratch normally involves 3 pieces of 4' X 8' wood (Could be MDF, plywood, etc...) 2 of the pieces will be matching sides, the last piece will serve as the bridging pieces.
Oh yeah I will be building an upright cabinet, I'd love to have a controller layout that would be good for Street Fighter II type games (two rows of 3 buttons) would that also let me play games that don't require all six buttons?
I'd also like the cabinet not to be a super narrow one so my brother and I can play against eachother without sitting in eachothers lap. Does that make sense? If someone might know what I'm talking about off the top of their head is there a particular name for that cabinet?
The standard layout seems to look like this (Give or take a spinner):

2 X Joysticks
2 X 6 Button Layouts
2 X Coin Buttons
2 X Player Start Buttons
4 X Admin Buttons
Optional: Trackball & Spinner
This will amount to 28 inputs, just enough for an I-Pac2 keyboard encoder.