For the plot diagram, refer to Freytag's pyramid. This separates the parts of the plot development.
Under Freytag's pyramid, the plot of a story consists of five parts: exposition, rising action, climax, falling action, and revelation...
For the diagram, I would make sure I understood each part of the plot development. The exposition introduces the characters. The rising action presents the conflict, and shows an increase in the energy and/or the excitement the plot is moving toward. When the plot development arrives "at this destination," the climax is identified by the growing intensity of the action—or the turning point. (However, the climax may be at the very end, leaving little or no time for resolution: see O'Flaherty's "The Sniper" or Connell's "The Most Dangerous Game.") The resolution ties off loose ends and answers any remaining questions.
For Eudora Welty's "Why I Live at the P.O.," I would include the author's introduction of the characters. They are certainly unusual, with interesting names. They are listed in the first line. You can use this as a guideline of who to introduce, but only give their relationships at this point.
I WAS GETTING ALONG FINE with Mama, Papa-Daddy and Uncle Rondo until my sister Stella-Rondo just separated from her husband and came back home again.
I would include names. How is Sister related to the others; who is Uncle Rondo, etc.?
In the "rising action" I would introduce the specifics about each character that demonstrate how they get along. For instance:
Stella-Rondo is exactly twelve months to the day younger than I am and for that reason she's spoiled.
This line introduces that the two sisters are close in age. Sister is the older. Stella-Rondo is the younger. You could note that Sister believes Stella-Rondo is spoiled, but do not include details with regard to the sisters' present troubles until you reach the end of the rising action. Follow this chronology, offer descriptions, but then also give the details of what causes the disruption in the household, which will lead directly into the climax of the story.
We (as readers) discover the problems between the sisters as Stella-Rondo tells her "tall tale" about how she came to have Shirley-T., and Sister (who cannot keep her mouth shut) offers her "sound of disbelief" in her "H'm!" Stella-Rondo gets aggravated and the tension rises. What really seems to bring about the explosion is Sister's need to needle Stella-Rondo about the child's similarities to Mr. Whitaker and Papa-Daddy.
…Of course I noticed at once she looks like Mr. Whitaker's side too. That frown. She looks like a cross between Mr. Whitaker and Papa-Daddy.
Each time Sister opens her mouth, the action becomes more heated. I would list these events in the upper section of the rising action.
However, the climax takes place when dissension erupts between all the family members (with Sister) and she decides to leave—including the fight that cements it. I would insert supporting details from the story.
The resolution takes place at the end of the story when Sister describes her desire to get away from home, but is still almost as closely tied to them living at the Post Office as she was at home. Here, Sister can describe how things have changed with her daily life, and she can explain the details of life with their family at the story's end.
In terms of organization and putting his information together, I would only include the largest events and details.