Your goal is a noble one, and one many of us aspire to but, unfortunately, at this point, some miniatures are just so rare that they sell for huge prices - if they are even on the market at all, that is.
The War of the Ring use literally the same models, it's like using 8 times as many chess pieces on a War of the chess board. Same pieces but a bigger scale of battle - so they are 100% compatible.
1) That magazine does not have every model, nor even every army - even when it was current a lot of things were skipped over. Your best bet will be to find second-hand miniatures (which often go for much, much less than their new RRP) and build up. I would recommend starting with a few factions you love and working up from there. Don't fall into the trap I did and buy too much at once! Take it from a hypocrite, you don't want to end up with endless mounds of plastic troops sitting forgotten in boxes
2) The terrain for battles is pretty much an ad hoc thing. A lot of game clubs will have public use terrain - though that will obviously not help you much in your own house! If you check out your second-hand websites - in Australia we tend to use gumtree - you can sometimes see wargaming tables going but you'll be limited by geography as postage would be prohibitive. Gaming mats are a viable alternative but there is no 'official' source for these for LotR, so it's just a matter of googling them and finding the ones that suit your eye the most.
Scenarios are in all of the books to an extent, if you're referring to scenarios as in 'chance encounters' or random battles such as king of the hill, to the death etc they will be with the main rulebook. If you mean like the scenarios for Helms Deep, or the siege of Minas Tirith - those are in out of production sourcebooks though many scenarios are in the old rulebooks -which can be bought for cheap usually.
3) War of the Ring is for a very big scale battle, the smaller and more popular game is the strategy battle game - the rules for which are currently in "the Hobbit: an unexpected journey" Please know that the new rules manual for the game, which will supercede these rules, is slated for release about midway this year.
4) Depends on faction and if you want to be a Games Workshop (the manufacturer of these models) purist. I myself use Vallejo and like them, but the Reaper, War Colours, Citadel and P3 ranges are all good paint sets. For brushes, I would recommend making sure that whatever brand you get - the hairs are sable-kolinsky
5) I'd recommend the GBHL and DCHL channels on youtube. Get a feel for the game and then invest in a faction you're passionate about. Rewatch the films and get your passions fired up. Make a Howard Shore playlist!
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