Tons of folks use coolers with good results. They hold their temps well, but it really depends on the ambient temp. In the summer I might loose a degree, in the winter maybe around 3 degrees. I use a calculator to figure my temp and add 3 degrees for thermal loss...some folks pre-heat their cooler with hot water so they do not need to account for thermal loss, I think that is a waste of time and water personally, adding 3 is much easier.
Water usage depends how much grain you use...1 - 1.5 qts water per lb of grain. You can roughly double that to determine how much you need for sparging...a little less if you go with a thinner mash, more if you go with a thin mash.
Fly or batch doesn't matter, both have their pro/con, whatever works for you, I would try both to see what you like.
Read, read, read, and then read some more, its always easier to have knowledge before an endeavor than have an emergency post saying "what do I do, I'm in the middle of brewing and I think I screwed up."
I hear you about time; however, I think the benefit of AG is worth it. Also, if time is pressed think about setting up for 10 gallons, twice the beer for about an hours more work.