Some good questions!
In the end, its always going to come down to personal taste + machine spec - ideally, you want as many leagues as your machine is fast enough to handle.
Nations: I strongly suggest that you include at least England, Spain, Italy, and Germany for any long-term game: this will keep the international scene active, keep the Champions League interesting, and provide big-money destinations for the top players. France, too, if you have a decent machine.
Beyond that, any nation you might want to manage in, sure. I'd say "Pick six", of which you've already got Australia, so just wherever else you might want to end up!
Note also that it might be "Anywhere you want to manage the international team of", so I wind up picking MLS even though I wouldn't want to manage in it - you might have a soft spot for Holland, or want to manage Argentina .. in that case, I'd recommend including the top league from that country.
Lowest Active League: The more leagues you have, the slower its going to be - so you probably don't want much more than the top league in most nations you select. That said, if you know a nation that you're highly likely to want to move to, you probably want a deeper league structure for that nation. For England, if you wanted to start at the bottom, I'd say include all levels, or maybe at least to Blue Square National. Since you'll be coming in from outside, I'd say you're likely to want around the League One level: League Two if you think you'll make the move earlier in your career, Championship if you think you'll make it later in your career.
Database Size: Don't do small unless you have to. Medium is much better, and Large is best if you've got a reasonable amount of RAM.
The "players included" is going to be
- a minimum set based on the database size
- every player in a league you have marked as active
- every player from a nation you have said "load all players from".
"Load all players from" - Personally, I'd think of this as the way to get players from a nation you want to manage internationally. For example, if you start a Medium DB game, and set yourself to be manager of the Ivory Coast, you may discover that they don't have any goalkeepers... despite the fact that there are several Ivory Coast goalkeepers in the DB when you look in the editor! The way to make sure that all of those Ivory Coast GK's are there for you is to "Load all players from".
I'd basically use it for any country you might want to manage that
doesn't have a league. For example, Jamaica, Ivory Coast, countries like that.
* * * * *
RAM is likely to be your limiting factor, TBH.
512Mb, I'd say Small DB and no more than 5-7 leagues.
1 GB, I'd say Medium DB and maybe 7-12 leagues
2 GB, You're off into Large DB and 15-40 leagues territory.
* * * * *
Assuming you have 2 GB and a good processor, and considering what you've said about where you want to manage, I'd recommend:
England - to League Two
Spain - La Liga only
Italy - Serie A only
Germany - Bundesliga only
Australia - A-League
France - Ligue 1 only
Brazil - top league
Holland - top league
Portugal - top league
Scotland - top league
With the five in italics yours to play around with, if I've gotten them completely wrong.