I run Kenda's on my Raleigh basket bike, they are a decent tire for the price and last well under normal use. You can go with a MTB sized rim as long as it is narrow enough to fit. The S-6 is a 597, the Raleigh uses a 590, the MTB is a 559, so they would be a bit small in diameter. I would consider using a 590, you can get a Sun CR-18 rim for ~$35, then you will need to spring for spokes ~$.75-$1 each.
I would probably just run the Kenda's and save my money.
Aaron