welcome to Android Forums.
What ROM to use is basically a personal preference. Do you want bells & whistles? Do you want the lean basics? A little of both? The way I choose a ROM is just to read the thread about it. If it sounds good I'll try it. If I don't like it its easy to restore the backup I made in recovery and go back to rooted stock or whatever I was running before.
Yes, I think custom Roms are better than stock. Generally they are faster and smoother. A lot of them now have most of the bloat removed and give you an option to flash additional files with the extras if you want them.
As far as extra storage, no ROM is going to give you that right now. The system partition would have to be repartitioned and there isn't a way to do that yet.
I've been using the Darthstalker ROM. I like it a lot. I think it meets most of the requirements your looking for. Wicked is also a really good ROM. Its similar to Darthstalker with a little more customization.
Look through the All Things Root Guide sticky at the top of the page for links to the Roms. Have fun!