To my knowledge, AVN will not "spread" to other areas of the body.  However, it may be a good idea to get MRIs on other joints (hips especially) to make sure that it isn't there already.  Whatever caused the AVN in your knee could have cut off blood flow to other joints as well.

As far as AVN being progressive goes, your main concern is a collapsing of the bone affected.   If it goes untreated, the weak bone could faulter, requiring surgery.  It sounds like your doctor is taking a traditional, passive approach to your AVN.  My first 2 doctors did this, and I wound up having to get a bone graft on my left hip.  It wasn't until I was in the first stage of collapse that they would do something.  My third doctor was more aggresive and told me that I should have had core decompression surgery when the AVN was first detected.  The recovery time is the same as what your doc told you to take weight off your leg and the surgery is usually not very painful.  It is simply a small hole drilled in the bone to help replenish blood flow.  I wish someone told me that I should have had it done when I was first diagnosed.  It may have saved me from a much more complicated and painful surgery.  I did have a core decompression done on my right hip at the same time as the bone graft on my left.  I was recovered on my right side within a week, my left side is still recovering, 3 months later.

Hope this helps