Joe,
But finally my concrete question - when you buy a Deering "good time" banjo (list ~$400) vs. say a "Sierra" (list ~2000) - what exactly are you paying the extra for ?
Is it the parts themselves where materials are more expensive a big part of it, or is there substantially more workmanship involved and that's where the extra $$$ goes ?
For any stringed instrument, the difference between a beginner model and professional model lies in a whole host of things. The primary ones are the quality of the workmanship, the quality of the components, the sound, the feel and playability.
Each of those things can be broken down into a list of minute details, most of which can only be discerned by a skilled player. If you never make it above beginner or intermediate skill level, you won’t be able to appreciate all the differences between a high quality entry level instrument and a professional grade instrument. Just don't buy a cheap instrumenet if you actually want to learn to play it.
If you google “banjo mute” you’ll see there are dozens of varieties. I’ve used socks, tee shirts, dish rags, etc. Whatever you use, a muted banjo sounds like a muted banjo. It’s not just quieter, it loses the character of the instrument.
Open back banjos are quieter, more mellow sounding and much lighter. Resonator banjos are louder, brighter and much heavier.
Only you can decide what you want and how much you want to spend. There’s no advice from anyone else that will answer either of those questions.