We have three (and hopefully soon to be four) home-based businesses here So I'll give you what info I can.

how do I go about setting up a website, etc to sell my product?
It depends on how much money you have to spend. If you have some capital to invest, search the web and find five of your favourite sites. Look down the bottom of the page and there should be a link to whoever the designer was. Click on it, search their profiles/portfolios and get some quotes from your favourites.

ABNs - can you earn up to a certain amount before you need one?
As a business you should have an ABN. You'll need one for certain things. You don't have to register for GST until you've earnt $50 000.
As a hobby you don't have to have an ABN. You can earn up to $20 000 as a hobbiest.

How do you register as a business, and does that necessarily mean you can purchase
things wholesale? Is this up to the wholesaler?
You register your business through your state government. This federal site should be able to provide all relevant details... http://www.business.gov.au/Business+Entry+Point/
Go to this site to find out whether your chosen business name has been taken...
http://www.search.asic.gov.au/gns001.html

Some wholesalers will only deal with businesses that have an ABN, some will deal with the public. It depends on the individual wholesaler.

Isn't there some sort of legislations that if you earn under a certain amount
from a "hobby" you don't have to declare it as taxable income? I know tupperware sell themselves under this guise..
The amount you can earn is $20 000

Hope that helps a little

My DP is a computer programmer and web designer, and I help out so if you have any questions in regards to websites etc, please feel free to ask. I'll try to explain it in non-tech terms

I also have a fairly comprehensive list of good web-sites to visit for information if there's any other area you need more information on.

Good luck with it all

Kasie