I really don't think people care what kind of school you go to!! As you said, they go on merit. If I apply for a job or something now I doubt they even care about my school or even know anything about the school so it doesn't have much influence. So....anyway, I wouldn't worry about that.
I agree, walking to school everyday with you and then when he's a bit older maybe other kids in the neighbourhood would be great!! I would've loved that. My brothers went to a school close to home and they had the best time. Were always out in the street playing with kids from down the road.
Hope you and hubby come to an agreement and you find a good school!!
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