Thank you everyone for giving your perspectives and experiences, hearing everyone's thoughts is helpful, additionally I think reading these has also helped me better understand my particular question.
First, to address the comments about doing what I can afford and makes me happy - there's certainly good reason to take that approach. I think one of the high points of the hobby is that you can dive as deep into it as you like. If you're happy with a simple loop of track, that's great. If you want to cut holes in the walls of a few rooms and create a giant multi-room layout, that's also great. But for me, I am concerned that I will never be satisfied with what I have and be perpetually stuck in a "grass is always greener on the otherside" scenario. Eg: I start with traditional O, then see how great some of the scale stuff is. I buy some scale items and then upgrade the track. But after upgrading the curves on my layout I want to do more - add reversing loops and sidings, etc that the scale locos can use. So I buy more track. But then one day I get frustrated with how much space the layout takes up, so I look at downsizing. There's also the possible problem Bob outlined:
@Bob Delbridge posted:I want things scale, but unless you put a cap on the amount of scale (detail) you'll never be pleased.
To make a long story short, I think I would do well to pick some proverbial borders or personal collections rules for my hobby where I know I can be content with and enjoy what I have in the long-run. I don't want to regret choosing a rule set a few years down the road and then look to change. A few people have said they have made a switch from traditional to scale and sold off their traditional items. That is something I'd like to avoid - selling what I bought (almost certainly at a loss) is a hassle to be avoided!
In closing, thank you all again for letting me glean from your wisdom. I'm still mulling over how I will structure collecting, but some great points were brought up here to help me figure that out. Also, recommendations on minimum track diameter have been dually noted thanks again!