God only knows what the OG would be for that recipe...3 lbs of honey in a gallon of volume is pretty standard starting point for mead, and will give you between 1.110 and 1.120, but there will certainly be sugars added by the candy. Scaling that recipe up to 5 gallons...boy that's a lot of candy! The ABV? Again, who knows...once you actually mix up the recipe and find out what your OG is, you will have a better idea of the potential; however, even given the low end of estimate from just the honey itself (OG = 1.110), your potential ABV is upwards of 14% (assuming you ferment to dry).
I'm uncertain from the way you phrased things whether you want it sweet or not...I think this recipe will need *some* residual sweetness, otherwise the butterscotch flavor will probably just taste weird. Overall, if you want it sweet, be aware that it can be difficult to control where your yeast ends, and if you really want to have control over the final sweetness, you're best off going dry, stabilizing with sorbate and metabisulfate and then back sweetening to taste.
In terms of the yeast, be aware that a lot of people don't like the Wyeast Sweet strain, and seem to find that it's kind of finicky and can get stuck pretty easy. I personally think that part of the problem is that people don't make starters, and expect a single packet of yeast to ferment a really, really high gravity must without any problems. For an OG of what you're talking about, I'd use at least three 5 gram packets of dry yeast. There are a lot of good strains out there; personally I like and have the most experience with 71B, but read up around here and you'll find lots of different opinions about favorite yeasts...
You should learn about the concept of staggered nutrient additions, and incorporate that into your mead making process. I have used the Wyeast nutrient in the past, and now use a similar generic version, along with Fermax which is a DAP (diammonium phosphate) blended with a few other things.
Packaged: Red X Weimea SMaSH
Recent Meads: Mead Day '11 Ginger Metheglin, Mead Day '12 Traditional (orange blossom) Mead, Simple Cyser '12
Secondary: Why do I keep this line here...?
Bulk Aging: Cocobochet, Wild Cider, Simple Cyser
Planned: Hop Metheglin #3 (NZ hops), Trad. Gesho T'ej