This diagram should help you building retaining walls. Retaining walls usually hold back earth and they should have drainpipes or holes in them to cope with wet weather and the occasional waterlogging. The size and spacing of the drains are determined by local conditions and laws. Stones with  flatter smoother faces are generally used at the front and less even stones, small stones and thin ones are used as fillers at the back. After 3 or 4 days, the soil can be filled in behind the wall.
Note that you can also make retaining with soil as the binder (see Living walls).
If you do so, you must pay greater attention to making the backing  lock well together

When the stones are laid, you press the mortar in between them with a trowel. If you keep the joints even around the stones,  it can look very well (even with large joints). After about 2 to 3 hours, the cement in the joints begins to dry and you can  scratch it out a little with a stick to make recessed joints or press it into the joints with the back of a spoon to make a raised line between stones or whatever the local tradition is.There are many local traditions and my feeling is that your wall should fit in. You do NOT leave the joints to dry as they are.
In the diagram above the horisontal joints are good but you should not do vertical joints in the fashion shown. They should interlock (as the horisontal ones do) rather than follow a vertical line. Otherwise the wall is more likely to crack.
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