Might does not get diminishing returns.
The bonus it grants to damage is additive and can get overshadowed by other, higher additive bonuses. But Paladins have not many of those (besides his weapons' quality and Two Handed Style) - so Might is still viable as a source for damage bonuses. For spell-like abilities like Sacred Immolation it is the only damage bonus (because those abilities can't profit from weapon quality or stuff like two handed style)
Might (as all dmg bonuses) helps with overcoming high damage reduction of enemies. While more DEX leads to multiplicative dmg increase and MIG is only additive, DEX doesn't help against armors' DR. Same is true for heavier weapons vs. faster ones: while on paper the DPS of light weapons is better, their dmg tend to get eaten up by damage rediction. So one should balance "damage per hit" and "damage per second"
Might also makes all your healing more potent (Lay on Hands for example and also Veteran's Recovery should you take that). It also raises your fortitude defense. The most nasty disables you can catch target fortitude, especially later in the game (paralysis and stun for example).
Perception always influences attack rolls. All of them - because it influences your accuracy and an attack roll always uses your accuracy vs. enemy's defense. So Sacred Immolation will be influenced by your Perception because SA does an attack roll on all enemies in its area of effect every 3 secs (with every pulse). The effect of high Perception is most visible in the early game because it will be one of the few accuracy bonuses you will have. Later on it doesn't make that much of a difference anymore because you will gain accuracy with every character level, from items and buffs as well. At the same time you can lower enemies' defenses with debuffs/disables. So for me personally it isn't the state I'm most concerned with.
Regarding DEX: it's an impactful attribute (in the scope of Pillars' attributes which aren't too impactful in the first place). It is the only thing that not only reduces recovery time but the actual action or animation time. Thus not only helps with swing a sword faster, but you can also react a lot faster AFTER you swing a sword. For example if you are a slow dude and swing your two hander and only afterwards realize your buddy needs healing, you have to wait a lot longer until you can cast Lay on Hands as if you would be a fast guy. So - it's not only about damage, it's also about reactivity, being able to adapt quickly to changing situations.
Two Handed melee weapons are not slower than the larger one handed ones by the way. A great sword is not slower than a sword. A morning star is not slower than a mace. The only melee weapons that are faster are the light ones: dagger, stiletto, rapier, hatchet, flail, fist. What makes one handed (bigger) weapons faster than two handed ones is only dual wielding (and two weapon style on top). A shield + sword setup or a single sword setup is as slow/fast as a great sword.
Two handed weapons deal more damage per hit (higher base dmg) and get a bonus from two weapon style (15% iirc). So I wouldn't say that Flames of Devotion (FoD) is bad for them just because it could be better with a dual wielding setup. Against high DR the two hander with FoD will perform better with its singular but high dmg strike while a dual weapon setup will be better against low DR foes with the two strikes with lower dmg. Kind Wayfarers prefer dusk wielding because the healing they do with FoD procs twice then. For the rest of the Paladin orders it doesn't matter that much. Flames of Devotion has a whopping +20 accuracy bonus which is good to have especially in the earlier stages of the game. It helps with reliably hitting enemies. Flames of Devotion adds a burning lash to the attack. Lashes are multiplicative dmg bonuses because all the physical dmg you do with the strike (including bonus from weapon quality, crit, might, two handed style etc.) will get multiplied by the lash and added as elemental damage. So if your weapon strike deals 30 slash dmg overall and FoD adds a 50% lash it will add 15 fire dmg. The lash can be raised with Scion of Flame (from 50% to 60%, increase of 20%). And you can add a burning lash to the weapon as enchantment (25%) and also add intense flames as talent (25% iirc). Both of those also get raised by Scion of Flame (to 30% each). So - it can be fun to use FoD even with a Two Hander. If you use Firebrand I would absolutely recommend taking FoD. If you prefer the attack support route with Coordinated Attacks etc. it's maybe not that important to use FoD.
Sacred Immolation is a killer ability. It gets influenced by MIG (dmg), INT (AoE size, duration) and PER (accuracy bonus). But it also comes pretty late so it doesn't make a ton of sense to build your whole attributes around it. It will be nice anyway.
I'd say your attributes look fine. 15 MIG would also be totally reasonable. 2 points don't make a lot of difference. In this case just go with an attribute distribution that feels best, also in view of your character role. If you think 15 MIG/9CON or 15MIG/12RES sounds more plausible for your Paladin than 17/7 or 17/10 then that's what I would do. You won't feel a noticable difference during combat from 2 points.
A skill which is more useful than others imo is survival. The camping bonuses you can get, especially the accuracy bonus vs. certain enemies, are good. See that you reach a certain threshold so that you unlock the second tier of accuracy bonus (+8 iirc) and then put the rest of your skill points somewhere else (etc. Lore so you can use some useful scrolls when the party is in a pinch or Athletics so you have an emergency heal).
