1. I'm really not sure how to answer this. I've been using the same machine since high school which was a hand me down from someone else. I think older machines are stronger and work better. Maybe check good will? Craigslist? Take fabric with you to test the machine. You can get a new machine, but since I use my old diehard machine I don't know how to shop for one.
You want a machine that can at least straight stitch and zigzag. A buttonholer is nice but you can buttonhole with a zigzag stitch since a special zigzag is all that a buttonhole is. (although it will probably be too advanced stitch for a new sewer) You might want to look into a serger, if you look inside your clothing that is actually what store bought seams are done with.
2. You can applique with just a zigzag stitch and do some small just zigzag stitch embroidery with a regular machine. Embroidery machines will do a much better job until you get better at it. Larger images require an embroidery machine. They are pretty pricey. If you want awesome embroidery you can hand embroider your items, that looks great but takes more time. (People didnt' used to have machines to do embroidery or sewing
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hand embroidery
machine embroidery
Machine applique (can be a lot more complicated and awesome looking than this)
HowStuffWorks "Machine Applique Quilt Technique"
3. You mean like printing words? Iron on printing might work for you - you can even print it in your printer. Also embroidery. I'm not overly familiar with this stuff. Iron on wears off, embroidery lasts longer but is harder to do or more expensive to get done. They do have iron on stuff at the fabric store that you can embellish with.
4. Depends what you want to make. New sewers can usually make stuff that looks half decent. There are tricks and things you will learn, but it usually just makes the construction better (better seams, finished seams, better hems) Making fitted items is more complicated.
5. You might want to look into some sewing classes near you, we have some great ones here at a sewing machine store, you just never know what you will find available. If you are going for fitted stuff you may want to take a fitted clothing class or a tailoring class. I haven't taken any so I can't say much about them.
Pretty much you want to read the directions well on the patterns you use and learn each step and plan how you are doing it. Then you dive in. If you learn to absorb each pattern you use into your design information you are able to do more. At least that's how I do it. Sewing is one of the few things I actually plan and am disciplined about.
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sewing.
