Yes vet care can be very expensive. When my Zeus needed surgery it would have costed me around $700 for just the surgery - which wouldn't have included medication and any future treatment that he would have surly needed. Emergencies can be expensive, so I suggest you either put aside some money in the bank or keep a credit card just in case. Bunnies are prey animals and hide their symptoms well when they don't feel good. Sometimes it's already an emergency when you first notice a problem and getting them to a vet right is very important.
I like the small breeds the best. My favorite is netherland dwarfs. Right now I have a lionhead and two holland lops, and they are all great too.
For cages, the bigger the better! My rabbits have a huge 5 ft tall 3 story cage and free range of our extra bedroom. Of course you don't need something that big, but get the biggest cage you can and make sure the rabbit gets plenty of free time outside the cage to exercise and explore. Some people think that smaller rabbits can get by with tiny cages, and that just isn't true. The smaller breeds are often more active and really should have the extra space to play and such.
I always keep my rabbits indoors. A lot of people use NIC (Neat idea cubes) to build their own cages. They are cheap and you can make some awesome custome cages with them. Look up "Neat Idea Cube cages" on google and you should get some sites with pictures and instructions.
The most common health issues can depend on what type of rabbit you have. For example, a lot of smaller breeds can get teeth issues because of the shape of their face. Lops can sometimes be more prone to ear infections because their ears get dirty and don't air out the way that other bunnies ears do. GI problems can be deadly and can happen no matter what breed you have, so make sure you moniter their food intake and ..output
How long are you planning on storing the hay for? Make sure air can get to the hay and that it doesn't get wet and moldy. I store my hay in boxes with the tops open and in gaint tupperware storeage containers with the tops off. It does smell great, I agree! I loove how my bunny room smells, the hay reminds me of the smell of tea.
Good luck - That's awesome that you're doing the research before hand!