I wouldn't limit my team  sites to only top level sites.

You will need to use smigrate, FWPs, STP files, or some kind of backup
and restore to reorder your team sites.

IIRC, you can have roughly 50,000 site  Collections per Virtual Server.

(1) Can anyone share how they decide when to use a SPS area  vs. WSS
Team Sites?
- Once I heard only use Team Sites if collaboration, multiple
contributors, etc. are needed
- Another time I heard use Team Sites when there is any
documents/lists/etc - basically almost everthing! Use areas to
really only help people find the right Team site  and share general
news that you want.

(2) Can anyone share how they decide when to create a new top-level
Team Site vs. creating a child Team Site?
- Once I heard that if the access controls are different, it is
easiest for maintainance to create a new top-level site.
- But what I've experienced so far it is if it is really related/spin-
off site it is easier to just create a child site and adjust the
authorities as needed.

My two cents...

1. I agree with your second premise completely. Areas are for
organizing, targeting, and categorizing sites. No content in the portal,
only links to content or better yet, cross-section views of content
(helps in the prevention of dead links). Content belongs in the sites.

2. This is a little more challenging to explain in a sentence or two. I
certainly think that you will have more child sites than top-level
sites, especially if you count workspaces (sites that you can create
from Office applications). I don't see how it will ease maintenance to
create a bunch of new top-level sites. Plus, you have to consider more
than just access controls when generating an entirely new Site
Collection: like the three galleries (Web Part, List Templates, and Site
Templates) and cross-site groups. Relying on Active Directory groups
will be the best way to reduce your maintenance.

lso remember that each Area, underneath, is a full-fledged SharePoint site  ...supporting a wide range of scenarios (use with discretion).

I also think of Areas as a SharePoint site mechanism that allows me to dynamically re-arrange a "site hierarchy" (using drag-and-drop via the Site Map). This is not possible with plain old WSS sites.

2. You also want to remember that Quotas are for site  collections. If you think a subsite would require a lot more space I generaly make them a top-level site so that I don't have to modify the quota for the entire collection..