Was out today fishing smallmouth with an 8 wt. Sage rod. I'm on a big lake where there's plenty of wind so the 8 wt. is nice when it's blowing. Otherwise, I'd suggest 7 wt. as a good all around choice. People catch bonefish and tarpon on these rods so they'll certainly handle any bass you encounter and throw a fly farther than you'll ever need. You can always go up or down a line size, too. Don't buy a gimmick short rod, get a 9 foot.
You don't need a $600 Sage, but don't make the mistake of spending $100 on junk. Fenwick World Class graphite rods are good for around $300. Orvis has decent rods in that price range as do others. I think $300 is about the minimum price for a rod you'll really want to own and enjoy using.
Slow or medium action isn't a bad thing when throwing big, wet bass bugs and lots of people love old fiberglass rods. Take a look at the new Fenwick Fenglass rods, they go for $200 and are fun for this kind of fishing. You can pair it with one of the new "throwback" Pflueger Medalist reels for a neat old school rig for around $300 to $350.
You can save money starting out by searching eBay for machined aluminum reels direct from China. You pay $20 or $30 for a no-name reel likely made in the same plant as branded stuff selling for $100 or more. Down the road when you want to spend a lot, you can buy a Hardy or something. Reels are mostly line holders and you probably won't be fishing bass off the reel. Plus bass don't run like bonefish or big trout. I like disc drags because I troll streamers for trout and salmon. I like large arbor reels.
For flies, everything loves to eat woolly buggers, muddlers, leeches, poppers and gurglers. I like chartreuse Clousers for smallmouth. There's an endless variety to try but you can't go wrong starting out with a black woolly bugger. You don't need giant flies to catch big fish.
Once you make a nice cast, get a monster strike on a popper and fight a big one on the fly rod you'll wonder why everyone else isn't doing it too!