Insurance is a killer on any WRX or STi. When I was shopping for a new car in 2006, I priced insurance on the WRX, Legacy GT and *shudder* Accord. Here were the figures for a 22yo, but just take away the differences in cost:
2006 WRX: $778/6 months
2006 Accord: $570/6 months
2006 Legacy GT: $565/6 months
And FWIW, the 2006 GTO I ended up buying was a bit cheaper than all of them
The LGT is a pretty good car. The suspension is definitely stiffer than your average Caddy or Buick, but it is far looser than an STi. I test drove an 08 WRX and the WRX was definitely tighter, but not a huge amount.
I'm 6' 4" 250lb and if the car were any smaller on the inside, it wouldn't work. As it is, the car is not comfortable for long road trips. My 5-foot tall fiancee doesn't like the seats for long trips either.
Rear passenger room is limited, you probably won't want anyone over 5-foot in there. That said, overall it is roomier than an Impreza and IMO nicer looking inside. The trunk is a good size; not huge, but plenty usable.
The 2007's are definitely the best year to get. Every model has an MP3 radio and split-folding rear seats. Top safety ratings across the board since the 2006 model as well.
The Spec.B is a great trim level, but the GT is a better value. The Bilstein struts by themselves don't do a lot for the handling, the car DOES need stiffer springs and sway bars. I rode in a Spec.B with STi Pink springs and CObb sways, it drove like it was on rails, even with the stock 18-inch Bridgestone tires. The value of the 6-speed is a personal choice. You'll do more shifting in the city, which I already do a lot of with the 5-speed, but it will pull out of a higher gear better (the 5-speed leaves some dead spots in power, IMO) and if you ever intend on hitting a (curvy) track, you'll appreciate the shorter gears to get you out of the corners.
You should test drive a used STi to see if it's what you want. The LGT is a very loose feeling car out of the box. Lots of pitch and roll, drivetrain slack, etc; as you would expect in a "family" sedan. My understanding is that the STi is a lot tighter, more visceral, but you pay the price in ride quality.
FWIW, the LGT with springs & sways I rode in had stock ride quality while feeling very controlled. I'll be putting that exact suspension combo on my car.
As for power, the LGT with a full exhaust and computer tune will be close to a stock STi, but loses a bit of power on the top end. The mid-range torque is rather good, first gear is ridiculous with exhaust+tune. If you're into such things, you can take the turbo off the 2009 WRX and put it on with an intercooler & injectors for a very effective upgrade. Properly tuned, I think people are making about 300WHP/330WTQ. Again, if I keep the car that long I will be going that route.
Happy to answer any other questions