Really solid choice. Capitola in particular is a good start location being close to a lot of great rides around Corralitos. Weather is variable, but generally pretty good. Ranges from absolutely flawless cycling weather (sunny, pleasantly cool) to rainy and cool, to coldish (low 50s), etc. It probably bears no resemblance to your conception of winter, and you will probably laugh at some locals for being wimps about the weather; we're a little spoiled. Some very, very nice road riding to be had around. Also some local Cyclocross races, and some pretty good MTB trails if you're into that. http://www.santacruzcycling.org/ has some good route recommendations. There is a pretty sizable road scene here. The Spokesman is the highest profile high end road shop, and are great. I also like Sprockets and the Bicycle Trip, and the cooperative Bike Church downtown can be a good resource. Epicenter (which now has a location on Westside Santa Cruz in addition to Aptos) is a solid Trek dealer. A little closer to you is Family Cycling Center. Really lots of good shops around in general. And recovery burritos.

Solid choice all abouts, really.