Ron,
The o suffix indicates that this gun was made late 1925-early 1926. The crown/N is the civilian proof mark of the period.
Imho drbuster has put you in the right ballpark for price. It is impossible to advise you more without a knowledgable description of condition, or pictures.
"Do I want to pursue a military Luger rather than a commercial model?"
Depends on your reason for bujying a Luger. Do you want one to simply have for the owning? Do you want one to shoot? Do you intend this to begin the establishment of a collection (small or large)? Do you have an interest, or family history, in a particular era?
If you simply want to own a Luger (or begin to study the type) this could be a decent choice, depending on condition. The price range you mention is certainly moderate.
If you are looking for a Luger to shoot, this particular gun may not be the best choice. .30 Luger ammunition is not very common and is relatively expensive, unless you plan on in loading your own ammo. 9mm is much more accessible. In this case you may want to invest in one of the more common WWII Mauser-made guns, as they have 20 years less use wear than typical Imperial examples.
One cannot really advise you regarding the other questions until you begin to answer them for yourself.
--Dwight
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