friction acts down the slope - this is where you messed up. That means
N sin(theta) + (mu)*N*cos(theta) = m*a
along the radius of the circular path.
Regarding weight's components . Components always along different directions regardless whether the body's on flat ground or a slope. Here your analysis is along the direction of gravity and normal to it - so there is no m*g in one eqn. and complete m*g in other. By the same token normal force has two components as it has some magnitude along both axes we analyse. Remember components are made for our convenience - it isn't that they actually exist uniquely. If I had chosen to analyse along different axes - say one down the plane and other perpendicular to it (which in fact I had) I would have had components of weight and not of the normal force.