It has been a long while, and I have made some large decisions and progress. So to close the loop on part of my goals and to inform folks that might be making a journey into model railroading and searching for others experience:
I did buy several items: a Bachmann On30 4-4-0, a Bachmann Porter 0-4-0, an S scale Gilbert SF Atlantic 4-4-2, an Atlas (traditional) O Atlantic 4-4-2, a Lionel O scale Camelback 4-6-0, a Bachmann Ten Wheeler 4-6-0 (part of a Christmas set), an LGB Stanz 0-4-0, and an LGB Porter 0-4-0. This was part of a 'scaling excercise' so I could see/touch/handle these things to know for myself the size differences. I actually put these in the yard since my ultimate goal is an outdoor layout. While this did cost me some money and some time to do this, I am pleased I went through it. I feel it has ultimately saved me some time and money in the long run by not making a bad decision *for myself* - YOUR decision might be different. The pictures are attached, my 2.25 year old daughter is in one for 'scale'. 
One thing I REALLY learned, traditional O scale is pretty much S scale! Beware!
I have been able to recover the bulk of my investment in the items I purchased as some were purchased broken and I repaired then and sold them for a profit. 
On30: too small for me, getting them on the track is too touchy relative to the size of the rolling stock, the detail is awesome, but too delicate especially for outdoors and/or children or people that are not used to handling detailed models. While doable, little room inside for adding electronics. Track, etc. is hella cheap relative to the other scales! Keeping the track clear outdoors would likely be more challenging.
S scale: decent size, but I still found it got lost outside. If I was going to do indoors only I would probably do S scale. While not mainstream, I think I could be selective enough to find rolling stock in my price range that would suit me just fine and no real need to worry too much if it was scale or not. Decent looking track that suits hi rail is kinda pricey, especially if you need UV resistant.
O traditional: same as S scale regarding size, no advantages except for price - maybe.
O scale: Now we are talking, this is exactly what I was imagining when I saw G scale and thought that is just far too large. Ultimately this is what I have chosen even though it has pitfalls of its own to watch out for, and I have not quite stuck to it. I shall explain. Real O scale is expensive and I have noted all along I need to keep the cost down/ be cheap. Then I found MTH Railking and some Railroad museum sites that actually list the dimensions of their rolling stock so I can check things out. Well many of the Railking locomotives, listed as scale or not, match the dimensions of those real life locomotives. For me that is good enough for my purposes. I do not need to match the actual class of locomotive - if it matches the Whyte classifications and general appearance it is good enough for now, I am more into simulating the operational feel of the railroad (maybe it will change later as I get more into things). Track, etc. will cost me here, it seems the only UV resistant track is Atlas O. I have had a note in to Micro Engineering for 2-3 weeks with no reply; I have also read their ties are kinda delicate. I may also lay my own track, not sure here yet. I was considering reworking old tubular O27 (I had a big thread on that in the O27 section) but I think I am not going to do that. Still a lot to do and a lot to decide on how to do it here, but I am happy with this decision.
G 'scale': Just plain too large, even outdoors I would need to allocate more space than I am comfortable with.
For now I am doing a Christmas layout around the tree. Everything will stay 3 rail (I think!) for this. I have 2 K-line Porters, an MTH Rugged Rails 2-8-0, an MTH Premier (yes!) G5 4-6-0, a set of 6 MTH Heavyweight passenger cars, and 10+ freight cars. I am working on enough MTH realtrax to put down around the Christmas tree so my daughter can run something there. So I have made a lot of progress towards my goals but as stated I have quite a bit to go, but at least I can run some trains soon.
