Istanbul Cappadocia tour advice

Hey everyone!
I’m planning a Turkey trip in the first week of July and could use some advice.
My rough itinerary is:
2 days in Istanbul, Overnight bus from Istanbul to Cappadocia, Rent a car in Cappadocia, Explore for the day, Hot-air balloon the next morning, Explore some more, Overnight bus back to Istanbul, Bosphorus cruise and more sightseeing, Flight home the following day at 5 p.m.

A few questions:

1. Istanbul to Cappadocia overnight bus**
   Is Obilet the best place to book?
   I’m choosing the bus mainly because my luggage may exceed domestic-flight baggage limits.

2. Where should I stay in Cappadocia?
   Would Göreme be the best base?
   Any recommendations for clean, social and affordable hostels? I’m not necessarily looking for a crazy party hostel.

3. Hot-air balloon booking
   Since I’m going during the first week of July, should I book the balloon well in advance?
   I’ve heard prices can change a lot. Is it better to book early, or wait until closer to the date for a possible lower price?
   I don’t mind missing the balloon if the weather is bad, but I also don’t want to discover that everything is sold out.
   Any trustworthy balloon-company recommendations where I can book.

4. Car rental
   Any reliable car-rental companies in Cappadocia?

Sorry for the number of questions,
Thanks in advance!