Hi Alice,
Wowzers - lots of questions and I'll try to do my best to help out.
I started out with a website and only started my blog a little over a week ago. My blog is in Italian, but if you'd like to take a look, you'll find it at http://larteaddosso.myblog.it/. I wouldn't choose to set up a blog on the same blogsite because it is an Italian blogsite. I can't help you out with whether or not a blog is a successful way to sell because the blog I started is more of a showcase and place to blab at myself rather than an actual shopping-oriented thing, but I can sure help you out with the basics and the other questions.
Here's where you can learn plain and simple what a blog is, how it works, and what you can do with it. It's a series of articles, so when you finish the introductory page, click the other links on the page to read on:
http://computer.howstuffworks.com/blog.htm
Google is a good place to start. They have a Blogsite at www.blogspot.com. The first thing you should do is roam around and check out the blogs there, look at the setup process, the availability of FAQs and other help options, then go on and investigate other Bloghosts (just google "blog hosts") , do some comparison shopping.
Actually setting up a blog is easy as pie even for people who aren't very tech-oriented. All the blogs I've seen have a selection of templates to use (which will be the "background" of your blog, the header, colors, columns, etc....like a webpage) which you can choose from for basic blog appearance, and easy to understand tutorials to guide you through the whole thing, as well as forums where you can get help.
ATTENTION - be very careful not to set up a blog on a bloghost which will insert pop-ups, banners or ads in your blog....for the same reasons that you will avoid this at all costs when you go shopping for a webhost if you decide to set up a website in the future. You hate pop-ups, I hate pop-ups, and so will every single potential customer who comes across your blog. Same thing for ads and banners, if you want to give a professional appearance to your web-presence, you don't want them cluttering and detracting from you and your work. This will definitely exclude a big chunk of blogsites, as most of them do insert ads, banners and pop-ups, unless you pay a fee. Blogspot to my knowledge does not have this problem.
Once you set up your blog, you should make sure to write on it every day, especially if you'll be selling through it. Even if you don't post an item every day, you should write a few words, maybe about what's coming, the occasional pic of what you're making at the moment, tidbits..anything, but you want people to feel you are around and attentive to whomever might come across the blog.
There are many people here who do sell through blogs, and no doubt can give you better input on the "keeping it going and attracting visitors" - there are loads of social networking sites that you can use to draw people to your blog, along with other methods, but that is an entire chapter apart :). Lots of artists keep blogs to attract people to their websites, which is another twist on the theme.
There are HUGE disadvantages to setting up a free website. I made that mistake myself, though I suppose its always better than nothing. If you want my two cents, the blog is a better solution. The reason? Free web hosts are usually really free, in that you don't pay for them in cash money, no hosting fees and no domain name fees...they make you pay by plastering your website with banners, ads and pop-ups. Many of them are also frame-based - I won't explain frames because complicated - I can tell you that in the past almost all websites were frame-based, and now most are not...because the major search engines tend to discard frame-based websites. If you aren't very tech savvy, you'll have a hard time finding out if a webhost is frame-based or not....they don't usually state that they are, wonder why? 
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The best and most awesome thing I've ever come across on the web is my own web-host. When and if you do decide to set up a website, consider them. No, I don't work for them, but you'll think I do when you're done hearing me talk about them LOL! I'm on Mister.Net (www.mister.net).
I bought a domain name for 35 dollars including a year of free hosting, and once a year I renew my domain name for 35 dollars. I pay NOTHING else.
No hosting fees, no accessory fees, no hidden clauses and mumble jumble. I have NO ads, banners or pop-ups, my website may have been down in all maybe 5 hours in the past two and a half years, I can receive email through my website, the basic package offers more than sufficient bandwidth, I have a control panel where I can see basic statistics, my website loads quickly despite numerous pics and pages, I was picked up by Google only a week after I'd been online, and last but not least - their tech support ROCKS! I get answers to questions and help even on Sundays, and the guys are so patient and nice - though I rarely need to contact them.The bottom line is that they provide the service and satisfaction that you'd expect from a webhost which costs 10 times as much.
Hope that helps, Alice! I'm sure you'll get more specific feedback from the other commercial blogging artists here, but in the meantime I hope my input is useful 
Andréa