How to tell a person this:
It's fine to say 'in 2016'. I meant while it's still 2016 we prefer to say this year.
Your prepositions are correct. Note that we don't often write 'on 25 of July', though. These are the possibilities:
25 July or 25th July (more common in British English)
July 25 or July 25th (more common in US English)
The preposition 'of' is only used in the full form 'on the 25th (twenty-fifth) of July'. This is a mainly British usage, in speech and sometimes in formal documents.
I'm a little confused by Hannah's comment 'We do not say "in 2016" '. In fact, it's fine, and common, to say 'in 2016'. Perhaps the omission of the preposition is an Australian convention.
And to answer your final question - no, we don't use an upper case 'Y' for 'you'. 'I' is the only pronoun which has an upper case letter. The only exception is when we are referring to God or Jesus, but unless you're contemplating a career writing hymns or prayers, this is unlikely to be an issue.
The prepositions you used are all correct. However, we do not say in 2016. Instead, we can simply say this year.