If you can't afford a teacher, here you go:
https://www.youtube.com/user/Lypur?feature=watchI can't play by ear (yet). I read music and I like it that way. I can also look up an online tutorial and just play the notes the person is showing me.
Play by ear if you want to, but I would learn what each key means, e.g. C, C sharp etc etc. That way you not only know what you're playing, but also how it sounds.
Learning to read music isn't that hard. Put effort into it and you'll get there sooner than later.
I'm not going to soften any words though, not gonna give you sugar or whatever; learning anything takes time and effort. That includes the piano.
Recently I've started playing the violin too, and it's hard, but I'm learning it gradually because I practise and put effort into it.
You can definitely do it. Piano is the most beautiful instrument in my opinion. You can make it as hard or as easy as you want it to be.
About the keyboard: if you seriously want to learn how to play the piano, get a 88 weighted key one. You already thought about that, so that's good.
I started on my sister's 35 or so keyed keyboard of 50 euros. After 3 times playing on it I got myself an acoustic piano thanks to the help of a few members here on pianostreet.
I've played both digital and acoustic, and while acoustic obviously takes my preferences (because I own the instrument), a yamaha digital can do the job fine. But Korg digital is also very nice. Played it and they have such nice touch.
Anyways, wish you luck and definitely learn if you can.
PS: If I could play by ear it would be amazing, because I just can't yet.