20 inches! You must be tall!!!!!! Mine is a 16, my Bf's is and 18, and his is way too big for me!!!! But I would say the 1 1/2in are pretty accurate clearance. But if you feel like you want more ask them about it. Mine was about that, but I felt that the seat was still way too high on the lowest setting, so I had them modify the seat to make it a little bit lower still.
Mine has disk brakes, and I love, love them. They have great stopping power.
I agree with that Trek, Specialized, and Cannondale are great bikes. I have only heard Gary Fischer bikes and never ridden one, so I cannot help there. My bike store will not carry Trek, because they say that is the evil corporation. I will also add Kona, as I love my bike, it has suited me very well getting used to trails, and braver.
I think if the bike that you tried is already too long and you can already feel it, then you need to keep looking. I agree with you wanting to by from a shop that you really feel good about buying from, even if it does mean that you will loose the rental fee. (I can go back to my local guys any time for a question or help and they treat me OUTSTANDING.)
$550 is about average for a really good starter bike, if you were spending less than that I would assume you were buying a bike that would not be suited for trails.
The boss rode (horses and bikes) for a long time with a very serious back issue (he ended up getting spinal fusion surgery a year ago October), and staying fit and strong was the best thing for him. Eventually the pain got too much for just about anything, hence the surgery, but until it was really, really bad, he kept on riding (and racing).
I recently got back into Mountain biking after a long layoff and I am totally hooked. I personally do not ride horses so I can not comment on changing the body however I do think it WILL help with balance.
I think a 20" bike is too bg for you. I would not go with any less than 2+" of standover height. My bike is just a bit too big for me and it has me too stretched out which makes it difficult on climbs and slows me down a bit on tight singletrack. Your inseam and total height will help size up a bike for you or...
If you have back probems mountain biking may not be your sport. you are very wise for renting a bike first and giving it a try. If you do not feel comfortable, swimming is great exercise and shouldn't hurt the back.
Fair hill is a great place to ride I would recommend starting on the blue diamond trail to get your legs then make your way to the red trail which is across the street from where the 3* event is held. You can always send me a message and I can help get you started. Also the Deleware trail spinners are a great help for new mtn. bikers http://www.trailspinners.org/