Getting a 3.1 ROM could be useful as it will allow you to run Workbench 3.1, which is better. For games, if they don't work with 3.1, you should be able to use the ReLoKick 1.3 or whatever to get a 1.3 ROM.

It is possible to use a memory card in place of an HD. You will just need to buy a suitably sized Compact Flash card and an Compact Flash -> IDE adaptor. I'm not sure how well they work, but a hard disk would probably be easier and more reliable. I think there is a topic about Compact flash cards on this forum which provides some info about it.

An A1200 is certainly good if you want to expand it, like with a 68030 or a PPC. I'm not sure what advantages it would have just for games, other than AGA which is only useful for AGA games.

Hope that helps.