Well, as Chip alluded to, this is a real can of worms! It's really a personal thing, like he said.
Chip is an HOer at heart, who took a brief (all too brief, we N scalers would've done well to have him flying out flag!) foray into N scale. I grew up an HOer, but switched to N back in the 1980's, so we have slightly different takes on things.
He's right that there is a diminished level of detail in N vs. HO, but that also has advantages. I can portray what looks to be a very detailed scene without sweating every single nuance of a scene (can you read the print on the newspaper thats in the gutter on Vine St.?). Also, I can model a vast scene that realistically dwarfs the train, such as a 2' tall mountain that actually looks right with a tunnel in it, or a 18" wide shelf that realistically portrays the rolling pastures of western Pennsylvania. Add to that the fact that a 20"r curve is considered most generous in N scale and a good size building only takes up 6" or so and you can see that there are benefits to N.
On the down side, N scale can be tough to get DCC decoders into sometimes, and sound is only now becomming a reality. Also, due to N scales size, weight is limited and therefore so is pulling power. Good small steam is also a hurdle for N scale, though it has been done. And you touched on another issue.....price. N scale certainly can be expensive, but so can HO. Thing is, item per item N scale can be just as cost effective as HO. The real difference is in the fact that in N scale you can have more cars and loco's in a given space, so thats where it can be more expensive. In other words, in HO you could fill a yard with 25 $8 cars and you're done. In N scale in the same space you can not only fit more yard tracks, but each car is smaller, so you may fit 70 $8 cars in the same area. Thats where the price will go up, not so much in the item-to-item pricing (it doesn't have to anyways). For example, I buy brand new, top quality N scale steam on the internet all day long for $50-$60. Thats very comarable to HO.
Good trackwork is a must for any scale, but you're right in that N scale is less tolerant of sloppy work. That isn't going to be an issue for you though since you're going to do it correctly the first time, right?
Now, HO has some real advantages going for it too. You can really detail a scene out and it looks awesome when you're done in HO scale. Also, if you can imagine it, it's probably available in HO. Loco's, cars, figures, buildings, HO has the largest selection for sure. Because it is the most popular scale it also has the largest support network.
On the down side, everything takes up more room, and sometimes space is at a premium.
In the end, it's really a personal choice.
If I were you I'd visit a few clubs with different scales, and a few hobby shops, and get my hands on both scales. One of them will "speak" to you. When it does, thats probably the scale for you.