I quite like the suggestion of a Dutch-style bike; the idea of getting something like a Pashley as an alternative was in the back of my mind, since the upright position and swept-back bars eilminate the problem of reach (I've actually test ridden one, and it was nice). It wouldn't be easy to ride as quickly as on a modern hybrid, though.
Modern Dutch city bikes are lightweight aluminium framed and fully equipped ( mud and chain guards, rack, lights, stand). They are nothing like the heavy, steel granny bikes.