I was at Target and Dick's last week and was looking for hybrids. To answer your first question, I looked at this bike.
it was a Schwinn with 700c tires, rack and fenders, $159.00
I ended up buying this bike:
A Schwinn Trailway for $200, pretty decent bike for that price.
The problem with dept store bikes is if you don't know how to set up and adjust your own bike, it may not be a good deal at all. I had to adjust front and rear wheel bearings because they were too tight. adjust both brakes, adjust both derailleurs and tighten the adjustable stem.
Question #2, A flat bar road bike puts you in the bent over position, whereas the hybrid will put you more upright.
I find that riding a mtn bike on the road is very uncomfortable, at least on my Trek.
I own one of each:
flat bar road bike
drop bar road bike
mountain bike
and my new hybrid