I'm not a very experienced sailor, but I do a lot of research before I buy things. So please take any advice I give with a grain of salt.
I was in the same situation, my wife and I are just getting in to sailing and were trying to decide on our first boat. We chose a Hobie 16 due to their wide-spread availability, afford-ability and PARTS. We spent about $100 on the boat and trailer, and yes the boat needs work. With parts readily available up and down the coast via Craigslist or part hauses, it was a bit of a no brainer. I have yet to see a single Hobie 17 for sale in my area, but that may just be my timing etc.
These boats are not complex, if you have a basic understanding of how everything works you should be fine. Check for soft-spots in the hulls, these can be repaired and can be used to push the price down. The same can be said of crimped, kinked or frayed rigging. Don't be afraid to barter on these and lowball, there are a lot of them out there and another will pop up within a month or two at the longest. I am an AVID Craigslist user and strongly recommend checking your area's site (if you have one). Things like boat trade and the online listings tend to have more expensive boats. Not necessarily better or worse, just on avrg more expensive than paper ads or CL.
Another reason for the smaller boat is that we can pick it up. We de-masted it, picked it up and took off the trailer. Obviously we don't do this often, but in a pinch it's an awesome ability.
I am biased though, I enjoy working on boats/cars/motorcycles/planes. If you're not confident in your ability to do repairs, I suggest picking up a cheap disposable cat or small boat to practice on. It's an invaluable skill that can help you get a lot more bang for your buck in MANY situations. I would recommend a visit to
http://www.boatbuilding.net/ it's a great site and it never hurts to learn.
Have fun, sail safe
Nick