Hi,
I have two embroidery machines, both came with 4x4 hoops (both with 5x7 and one with a 7x12) and it's the hoop I seldom use. For 95% of my embroidery I reach for my 5x7 hoop. I do a lot of towels, quilt blocks, and some shirts. I do use my big hoop, but mostly the medium one.
I buy my thread by the spool. I bought a set of embroidery thread when I first started, still have some of the colors untouched. I would buy the basics, black, white, tan, red, etc., and then buy specialty ones that you need for specific projects. Over time you end up with various shades of every color....believe me!
Have fun......embroidery is addicting!
Bev