At 41 you've still got about 10 years before the general aches and pains begin. Something to look forward to. Good you're loosing weight and getting active now. You should have an ortho take a look at your knee just to make sure you're not causing increased damage by pushing it when it hurts. Nothing like finding out as you schedule surgery that it could have been avoided with a little bit of care.
Pushing too low of gear on hard exertion can cause knee and back problems, especially if your bike fit is off. Having some lower gear options would likely help considerably as would making sure you've got a proper fit.
Might be worth it to make a trip to Streetbike Named Desire in Pala Alto and have a look at their city bikes. Much better from a knee/back standpoint.
Last edited by CrankyOne; 06-15-14 at 06:02 AM.