What else do I need to be able to rip and set this system up? I know a blue ray drive of some sort. What is recommended? What about ripping software compatible with my mini? I feel guilty having a computer sitting next to a tv for two years doing absolutely nothing and never getting this up and going!
Don't feel too guilty, there's no sense starting to rip all your content unless you've already figured out how you're going to use it and also have some place to put it. Now that you have some serious storage space you can dive in. Handbrake and MakeMKV have been the two essential Mac ripping tools for many years. Back when storage space was relatively expensive, there was real value in something like Handbrake so you could create smaller size versions of your rips, many many hours were spent figuring out just how to tweak Handbrake parameters to give you a file that would look good & play back on an iPad and also on your big screen by a Mini or Apple TV. It seemed like a dark art at times. But that was ages ago, storage is very inexpensive these days, even inexpensive years-old Macs are capable of playing back full size blu-ray rips and while I don't call on Handbrake much anymore it's really up to you to decide whether it's worth your time.
As far as software, just start ripping with MakeMKV. That'll give you a file with video quality equal to the disc which can easily be played back by Plex, XBMC-Kodi or by an app on your AppleTV. Then decide whether to create & store smaller size versions or just transcode on the fly when needed.
Here's a good intro to ripping tutorial:
Any USB external blu ray drive should work just fine with your Mini. I have a slim Samsung portable drive bus powered by two USB ports and also an LG 5.25" internal desktop drive in an external USB enclosure. I think the larger issue for you will be one of process and ergonomics--if your Mini is next to your TV do you really want to be getting up and down to pop 1500 discs in and control that process remotely from across the room? If you don't have any other computers in the house you may want to set the Mini up as a desktop ripping station somewhere convenient, where you can sit at a desk or in a comfy chair, do other things and control the process more easily. It's going to take you a long time to rip your discs.
I have a 2011 Mini & aTV3 at one TV and a 2012 Mini & aTV4 at the other, but my blu-ray drives are usually connected to other Macs, a Mac Pro and a Macbook Pro. I just find it easier to rip and import stuff with them rather than the Minis.
Also, I would like to hear thoughts on this kind of setup versus future-proofing vs the streaming now proliferating the video market. I like streaming but I am not happy about the lack of choice in viewing options. I am also not a fan of subscriptions and ongoing monetary commitments for services. It seems that 15 years ago (or so) it was vogue to have nice speakers, receiver, dolby ... and other niceties but now in homes it is Apple TV and screen hung on the wall with no speakers, etc. Am I headed down an obsolete path?
Good sound should never be obsolete, but it is up to you to prioritize it. Even in this high def high tech age full of iOS devices, streaming options and modern cord-cutting sensibilities there's still a lot to be said for maintaining a very traditional-seeming set up of audio separates at home--a good AVR, good speakers and a good subwoofer for 2 channel and multi-channel listening. Route everything through you AVR, you can still have the large flat screen on the wall and the best sound you can afford in your space.
As far as embracing streaming, let me give you a real world example of where streaming may end up being less expensive in the long run--you're a movie fan, you may like arty foreign movies, you may have a good number of Criterion titles in that 1500 dvd collection, Criterion starts releasing blu ray versions, do you want to replace all your older SD dvds with higher quality HD rips? Does owning a movie, whether on dvd or blu ray, mean as much to you today as it did 10 or 20 years ago? What if a streaming service like Filmstruck comes along where you could watch any Criterion title on your big screen via the Apple TV or on your iPad anytime you wanted to, many of them in new HD transfers? Filmstruck is $100 a year, which is roughly the same cost of buying 4 blu rays--which is the better value? Does knowing there's something like Filmstruck out there make you more or less interested in ripping your older Criterion dvds?
Everyone will have different answers and different approaches, the goal is to figure out what works for you.