Thanks for the input blt2ski, we have an 88 35' 5th wheel, it doesn't have any slideouts, so 8*35 would be 240 sq ft. We could actually go a little smaller if needed, but are happy at this size.
Most of the questions I have are about actually replacing the trailer with a sailboat (option #2) rather than going with option #1 above. I feel that I've traveled a similar enough road in the past to have a good handle on that one.
I understand from the advice above (and just what makes sense), that having a smaller trailerable sailboat and continueing to live in our current location, is probably the most economical and would put us in range of more sailing destinations more quickly. However I would like to explore the idea of living aboard, and be able to make the best decision for us. Option #2 holds more intruige for me, and I'd like to know more about it.
A couple of other tidbits for input:
What is it like sailing up the coast? Say I wanted to go to Portland or something?
Is it reasonable to purchase a boat in the size range we're talking about for $50k?
Thanks again for the input.