Steel road bike with everything in working order and lights will work great for you. You can even save some money if you go to your local bicycle co-op and buy a vintage one from them.
As far as riding on the road: You are safer because you are more visable for pedestrians and cars. You also pose a danger to pedestrians if you are on the sidewalk, and have to deal with sidewalk hazards like poles, benches, mailboxes and uneven surfaces.
Gotcha, I know but its just seems so deadly riding on the road almost getting run over every time by clue-less motor vehicle drivers. I can't even sue them for copeaus rediculously large amounts of cash. Here soft tissue damage is $500 for motor vehicle on motor vehicle accidents. Thats the government protecting the private insurance companies of Alberta. I wish I was in BC.