Pamestique 

Since your budget is really limited and you plan on riding dirt trails then your suggestion of a 29er hardtail is probably a good choice. The problem I see is your height. I am not a fan of shorter people (less than 5'10") on 29ers because of the toe overlap. What may be better for you is a sports style bike (sometimes called "trekking" bikes). A rigid/HT mountain style bike with wider tires and a flat bar (although I would still consider a riser v. flat bar if your have hand problems). It is made not for real mountain biking but for off-road trails like "rails-to-trails".

Not certain the shops you have nearby but here is an example of what I mean from Performance Bicycles... on sale in your price range:

http://www.performancebike.com/bikes...400310__400310

Bottom line considering your budget just find something you like that fits well (key element). If you stay with the sport you can upgrade to something else...

Comfort with hands and seat: make sure you are using a good gel padded cycling glove for your hands. Also if you are not wearing with a good bike short (I suggest the Terry T-Short or anything by Shebeest) and a chamois cream, no doubt any seat will be uncomfortable. Like anything it takes time to build up a tolerance of the saddle... just need to spend time riding the bike. Again I would resist putting a wide saddle on any bike...