I'm also a smallish seller - I have about 300-400 items on average, and one main advantage with the store is being able to create categories and sort your items in ways which makes it easier for buyers.

There are no listing fees, so go wild. 

I don't use SKU's and I don't care when my items sell, nor when they are listed. Some items can sit in a shop for several years!

Reporting is in your Seller Hub under Payment/Reports. You don't need a shop to run a report.

I'm not sure about offering free returns as you are selling a lot of clothes and some buyers tend to treat such sellers as clothes rentals. They purchase an item, wear it for an event and then claim there was an issue and try to send it back on your dime. Lots of seller complaints about this.

I wouldn't worry about growing until you have consistent sales. Clothing is a very saturated category, and I think you'll struggle to sell much as you have absolutely no measurements. Saying that something is a size 14 means nothing.