Hey
A budding lure maker??!! Awesome!!
There is no best kind of wood really...well depending on what type of lure you are going to make. Balsa has very high floatin poroperties, but is really soft. Denser woods like basswood, popular,pine, cedar and other can work well for some baits, but not so well for others.
Paints- I use spraypaints right now until I can get a better compressor for my airbrushes. Spraypaints can leave an amazing paintjobs if done right(check out the tackle category and locate the "Lure Painting tutorial" thread)
Lure making and painting is a very rewarding part of fishing for me. To really learn about making/painting crankbaits go to http://www.tackleunderground.com/community/forum/13-hard-baits/
Tons and tons of info there and lots of detailed tutorials and articles. Have fun, hope to see some pics of your creations soon!!