If you have children, that will complicate matters a bit, but someone who has had children and transitioned should be able to help you with that. I transitioned early, so I'm afraid I can't offer much advice.
Testosterone is great (if you intend to transition and want all of the male characteristics it affords you). Giving an injection to the thigh every 2 weeks is a pain, but it takes less than 5 minutes and just becomes second nature after a while.
I feel completely male (even though I still have my vag). If a man gets his penis blown off, isn't he still a man, after all?
Your bottom half doesn't grow, with the exception of the clit. It gets thicker and longer. I don't recall how large mine was before T, but after being on T for 6 years, mine is about the length and width of my thumb. Everyone is different though...some guys aren't as lucky and don't get a whole lot of growth. The T DOES make it more sensitive.
Explaining that you want to be a man, and yet still like men, is very simple. Your gender identity has nothing to do with your sexual orientation. Your gender identity is who you identify as...do you view yourself as a man? Do you want society to view you as a man? Your sexual orientation is simply what gender you're romantically and physically attracted to. A lot of guys I know started out being gay, but after they transitioned, they were bi (and some even became straight).
It's funny because my mom is more accepting of my being a gay man (ie: having a sex change to be a man, yet being in a relationship with another man), then she is with my possibly having a relationship with a woman (even though, to society, it would be a straight couple)...go figure.
