I guess I am having trouble understanding how a bandsaw can be used for this.

There several things a TS can do that a BS can't (i.e. dados, ripping
plywood, smoother cuts with a good blade, etc.). But there are a lot
of things a BS can do also beyond scrollsawing, including dovetails,
tenons, resawing, and most rip cuts. Blades are much cheaper, and it's
much safer with no risk of kickback since the blade is moving down and
not towards you. Wide rips like plywood can be done with a handheld
circular saw. I'd do some reading about bandsaws - you can get what I
would consider a fairly good one for $300-400. Not trying to talk you
out of the TS - just consider your options, what kinds of tools you'd
probably keep indefinitely, and what kinds you'd want to be replacing
in a few years.
If you decide you still want a TS (or a BS), I'd look at Grizzly - they
have 1.5HP TS models starting at $495 + shipping.
Good luck,
Andy