The terms are interchangeable. "Sheath" cake seems to be unique to Texas, whereas the rest of the country tends to use "sheet" cake."Sheet" cake refers to the pan the cake is baked in; no one seems...
Tell him about what? What dessert to make him? You could try cookies (avoid cupcakes, they are just personal-sized cakes), ice cream, or pastries (pies, tarts, criossants, ect.).
Saying someone should "pass on the cake" or "pass on dessert" means that they should not eat it. This is almost always a semi-polite but still sort-of rude way to say that they are fat or overweight...