OK, answer this: Are you looking to buy new, or used? And if used, how old back are you looking to go?
Answers to your questions:
1)This is really a personal preference. It all comes down to how much power and the quality of sound you like in your system. I personally think that the MACH 460 sounds great and it has plenty of power for my taste. But then there are hard core stereo people that will tell you any factory system is junk.
Ford for '02 now has a MACH 1000 system which has 6 disc changer, 2 10" subwoofers, etc, and 1000 watts of power. Or you could choose to go with a MP3/CD system instead.
2)Its so easy to get that classic Mustang "ROAR." All you have to do is replace your exhaust system with parts from the aftermarket. Either a set of mufflers or a cat-back will do the trick, and then an H or X-pipe will really help, and all while adding power too.
The hard part is choosing what to buy because there are so many different companies selling exhaust system components right now. You can spend as little as around $240 for H-pipe and mufflers, up to $1000+ for X-pipe and cat-back (depends on brand of course.)
3)Again, what really counts here is your opinion. Get what you like, its your car.
I personally like leather. I think it feels nicer and its easier to clean and take car of, but thats just my opinion. Cloth will help to hold your butt in the seat better during hard cornering, and it weighs less, so some people like that better.
Stangnet: 2002 Mustang