Question for you fly folk

[ProfessorLongArms]

It's end of the year, and I'm taking stock/planning for next year...
I've been getting a sense of the seasonal rhythm of Southern California.

I've noticed a pretty decent fly fishing contingent on here over time. Though I've been doing a bit of research, but figured it'd make for fun conversation here as well.
As I'm getting back to work and my disposable income appears on the horizon again, I'm remembering how much I loved Fly Fishing growing up in the south.
Mostly river fishing in GA for rainbows and browns, and pond/Lake fishing in AL for Bass, Panfish.

Fun story: My grandfather always kept a stocked pond full of catfish. Every evening he'd drive the truck down with a 3 gallon bucket full of feed. The catfish would come up and just cruise the surface hoovering it up.
My dad and I tied little brown half sized woolybuggers for feeding time, and it was a bit like freshwater cobia fishing on the fly. They made for the best runs I've ever had on a fly reel.

My house burned my Sophomore year and I never got around to replacing most of my fishing gear.

I'm thinking I want to get back into it.... Play in the streams up in Eastern Sierra.... Possibly add an element of challenge to my saltwater fishing from time to time. . . I'm also stoked to have a casting pond in the Pasadena Arroyo just around the corner form my house.

I'm pretty sure I'm just gonna grab an Orvis Clearwater outfit...
I like the look of the reel and I like the 25 year policy.
I always used Orvis gear when I was a kid, though I understand there are a lot more options these days.

First question: Would I be mistaken to go any cheaper? Anything else "entry level" you'd recommend?

Second question: If I wanted to start traveling north for something more substantial like steelhead, would I want to start out with something more than a 5 weight? Would it be a mistake to go up to a 6 or 7 on my first rod if I'm likely to start out in lakes and streams for trout?