Does it get cold where you are?
Is the shed insulated?
if yes and no, then youre going to have problems with cold when your light is out during flowering.

About the venting, I would seal the windows and vent through a hole in the wall....much more controlled that way.
And yes, a 1000 Watt would be better, but the issue is heat....you will need some very good ventilation with a 1000 W in 16 Sq. Ft.
600 will be fine.
And I would get a HPS. If you have the money, get a switchable ballast. Or, like hombre above me said, get the HPS and use blue spec CFL's around it.

Good luck and keep us posted!