You're working with the LBS and you still want recommendations on what they should order for you? Find out what brands they can, because there is no use in you reading names that the LBS can't order.
Also, you could just swap out the knobby mtb tires for some road tires- they do come pretty wide (mine are 26x1.5). You might also think about swapping out your current fork for a 'suspension corrected' rigid fork.
You mentioned a Giant comfort bike- I'd shy away from that one for your application. Look at the Giant Escape City, which is well under your budget.