need a new bike

After several years of not biking due to hip problems, I started riding my 15 yr old Nishiki hybrid and discovered it's no longer good for me. I am just shy of 6' tall and weigh 195 lbs, the bike is a size 22" (too big), the seat is real uncomfortable, and the horizontal top tube is tough due to the hip repair. In short, I've been looking around and have narrowed my choices to 2 Gary Fisher models: a size 20" Tiburon and 18" Advance. Both are women's models and I feel the step thru design will suit me. I believe the Tiburon is classified as a hybrid, and the Advance Mtn bike. I need some expert opinion to decide if the 18" is not too small if I feel ok on it, and since I ride mostly on paved suburban streets and an oceanfront boardwalk, does it matter if the bike called hybrid or mountain. I do realize I can just change the saddle, but from what I hear, there is a lot of new technology that a new bike will afford me. Both bikes are around $300, which is about what I am budgeting. In addition to answering the above question, I wouldn't mind hearing suggestions for other brands. Thank you all,