I do web design and web development profesionally,
I can tell you that Macromedia Dreamweaver is one of the best tools for web design. It might be hard at first, but once you get familiar with it, it will get much easier.
A very good combination would be to use Adobe Photoshop for the graphics, and for the web design/coding Dreamweaver.
If you want to include a content management system or some dynamic features, use php for the programming/coding part, and mysql as a database management system. Both are free, easy to use, and you can find plenty of tutorials for them on the internet.
Find a good tutorial for Dreamweaver, there are also plenty good ones on the internet (for free).
As far as web hosting servers are concerned. You need to be more specific about your website, meaning , how much traffic will it generate, will the users be doing any heavy downloading, do you need a lot of disk space.
Are you planning on making the whole website by yourself