Like you said, start off where you are comfortable. As for the AB, when I mentioned it did not matter, I stick with this a little. Duel action is key and even needle sizes. The only time I change my needle to the biggest one is when painting really large jobs. Other than that it is the small one all the way. I know a couple guys that can paint circles around most and the will use an old cheap a$$ AB they got a hundred years ago...because it works great and that is what they are comfortable with. When you ready there are an number of ways to go on AB's but you may just like the one you have!!
The paint would looks really nice, after a number of passes with really thinned paint. Sometime it is actually a nice way of laying down a dust or mist coat, is to over thin the paint and make several light passes. Same for using specialty paints light Alclad, after a base is on you would turn your comp. down to around 12 psi and make a couple light dusting to get the effect.
There is nothing wrong with the craft acrylic as long as the are designed for this process and they are thinned correctly. Like you said try mixing with water and have a go. You can do this in the cup on the AB if you like. 50/50, water to paint to start the add windex if you like or 50/25/25 Paint, water, alcohol. And read!! the more you read others techniques helps you get comfortable and develop your own "thing".
When you comfortable enough to try it out on a kit, I would suggest Tamiya paints to start. These have a great mix and color range already but if you use their thinner of even lacquer thinner, the larger jars will last a while and you will see the difference. You only need a few drops to a few drops to paint a good size area on most small models.