Many years ago Sterling had a wooden kit of the USS Missouri in a fairly large scale. Unfortunately Estes bought the assets of Sterling and the Missouri is not currently available. I hate to think what one might run on EBay. About the only option today would be a plastic model and about the biggest is 1/350th. Tamiya has a good kit, but if you want wood you will pretty much be out of luck.
While I have seen some hand painted models it is a skill I have never been able to develop. Most really bang up jobs are done with airbrush. For that I would recommend a Paasche model "H". It is good, durable airbrush that is packaged with three different tips. It is cheaper than an Iwata, though some Hobby Lobby stores carry both and you can usually score one during Hobby Lobby's 40% of sales.
Acrylic paints are something that I have not gotten into and do not know much about. The advantage is that you do not have to use special thinners. Some modelers use Windex to thin. My experience is mainly with enamels. I have a friend that uses finger nail polish thinned with lacquer thinner on his cars, as he likes the range of colors and fine grain of the metallic/metal flake ones.
You do not have to have a compressor, some people prefer to use a CO2 bottle, but that seems somewhat expensive. Some of the discount tool companies (like Harbor Freight) stock inexpensive compressors. Probably the most import thing to a good finish is good surface preparation. In other words a good clean. Smooth surface. As I have gotten older I have developed a tendency to prime the surface and after that dries well to sand it with very fine grit paper. Try 3200, 2500, in that range.
Afterwards I wash it and allow it to dry thoroughly. Thinning the paint is an art, not a science. That is something you just have to experiment with.
The best (smoothest) finish should be obtained by applying a good color coat first. After that has dried well you can polish out any irregularities with fine grit sand paper (2000, 3200, something of that order.). If additional coats are needed you can apply them lightly afterwards. I would wait for clear coat until the finish is blemish free. If you are using gloss paint for the color coats make sure that the coats are thoroughly dry between coats. Sometimes that might take a day or two. A trick that a friend uses for his funny car models is to use finger nail polish as it dries very smooth.
I have managed to get fairly smooth finishes by polishing the surface prior to my first coat and building up the paint in light layers. I also sometimes use flat paints and a final gloss coat that usually results in a smooth finish. There really is not a science to good paint finish; it is more of an art that each person develops on their own.
I am not sure what scale architectural models are build to, but 1:200 does not equate to inches very well. 1/48th works out to 1/4-inch equals 1 foot, and 1/72 equal 1/6 to one foot. The scale should be divisible by 12 (i.e. 1/144th scale would be 144 divided by 12 which gives 1/12 of an inch equals one foot). You could always go with 1/192 (1/16 of an inch equals one foot), which is a popular scale for ship models. Another choice would be use metric where 1/200th would work fine.
As far as materials you have a good choice. There is always the old standby: balsa wood. Balsa is light and easy to cut. A better choice might be plastics, in which case I would recommend using plastic from Evergreen Scale Models. That company produces a wide variety of shapes (sheet plastic, I beams, corrugated, etc.). Plastic also produces plastic in many construction type shapes.
Three possibilities come to mind. One is the old standby balsa wood. Balsa is fairly cheap and easy to work with. Several glues can be used with balsa: Elmer's, wood glue, super glue and even an adhesive that is used it wooden model construction. Balsa can be cut with an Exacta knife, or razor blade using a straight edge for straight lines. Sheet plastic is the second material.
Super glues, or solvent type glues work fairly well and plastic is very easy to cut in straight lines, you need only score it with the blade and then snap it along the line. The third possibility is solid foam like that used in insulation. The first two are available at any hobby shop and the foam is available at a hardware store. There are always the old standbys paper and cardboard, but they do not offer any more ease in construction and will not have the strength of the other three I mentioned.