If you want to get into spraying, spend as much as you can on a compressor. A 25l 5cfm will struggle to keep up for sure (I started with one back in the day!). A 50l 10cfm will be much better, but even then......(Second hand on the bay is worth a look)
As for a spray gun, spend as much as you can. A decent gun will give much better results when set-up correctly, and will last you years if looked after correctly. DeVilbiss is my weapon of choice, but SIP make reasonable good quality guns along with others.
Suction/gravity? I use both now, job dependant, but started with a suction.
And yes, you will need a water trap/filter in the line, even if you use an oil free pot.