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You'll be on to something with steel burrs. [link].
Thanks! Is this the Vario that you're referring to? I can't seem to find a link on Amazon for one with steel burrs.
Completely off topic, but I just noticed your username. Do you work in the medical field? I'm a lab tech working nights in a smaller hospital.
The budget is going to get gnarly, especially if you buy things new.
I can tell you that setup I see recommended most often are the Baratza Vario (not W), the Crossland CC1, and a good scale, which is also probably one of the cheapest ways to do it. My wife and I also pretty much only use the same bean over and over again, so tuning it in between batches is pretty simple.
The scale in the grinder is a nifty feature, but it ends up giving your dose +/- .2 grams, whereas if you if you tune it in with a scale and the built in timer, you can get it down to smaller than +/- .1 gram. It may not seem like a big deal either way, but I use the same bean with the same dose over and over and over... So I feel like the added feature kind of goes to waste.
You can try different grinders like the Baratza Sette, which uses conical burrs vs the flat burrs of the Vario, but is new and unproven. There is also the Baratza Forte which is the older brother to the Vario and is supposed to resolve some of the flaws with the Vario. Your other grinder options are stepless (preferably doserless) grinders like the Fiorenzato, [Mazzer Mini][link]) (La Marzocco sells Mazzers, so there is that) and others that I can't remember at this point.
At the top of the home espresso machine market price wise is La Marzocco. Honestly, I think the only reason to get one of these would be to piss people off. Breville Dual Boiler(BES920XL), Rocket anything I guess, Rancilio Silvia + a PID kit, and others. I think a PID is a must have feature for any espresso machine.
I am by no means an expert in this topic, I'm just in the middle of researching an upgrade. I'm currently considering the Fiorenzato (because the name sounds cool. No really, I don't have a good reason for this. My Vario is more than sufficient, it just annoys me from time to time) and the Breville Dual Boiler (it's chock full of features and it has a bigger portafilter).
I agree - you'd be better off with a cheaper single boiler machine (Quickmill has two single boiler PID machines with an E61 group. I have the Alexia and it's fantastic). You'll want/NEED to spend a lot more on your grinder than the one you posted. The grinder is always going to be the weak point in your system, and you'd do yourself a massive disservice getting a sub-par burr grinder.
Take a look at these, which are generally well-reviewed "entry" points into good grinders:
The first two are bulletproof, the third is well-known for incredible grind quality while having a bit of a plasticy feel