I'm also a student (Geology) and I've got the i5 256gb Surface and it manages fine with tasks I throw at it, its got a good balance of both processing power and battery life (7-10hrs) and I'm going to guess that the 128gb version will work about the same. I would get the Pro 3 over the Pro 4 as I've heard rumours that it'll have less processing power, which means that it'll have lower performance and could lag, which is one of the reasons why I got the Pro 3 over the Pro 4. I'm not really sure about 'Microsoft extended' as it seems that it gives you 2 years extend cover (I would like to go into further detail about this but sadly I don't have this cover as its not available in the UK). However you could look at SquareTrade, I've heard that their warranties are quite good. I don't bother with insurance as I'm quite careful with my tablet (well who wouldn't be with a ?900+ ($1000) tablet) and I'm thinking of getting a hard case, such as the Trident Cyclops to protect it from accidental falls.
Now then, about the type cover, it really depends if you write or type your notes, if you mainly type it would be beneficial getting the keyboard, however the pen and onscreen keyboard are a ok substitute 'till you get sufficient funds for the real keyboard.
Furthermore have you looked on Microsoft Student Store? Its 10% less than the RRP, and using it I've saved about ?100 ($150) on hardware. Also have you looked on BestBuy? I've heard that stuff from there is dirt cheap!
Also if you are getting the Pro 3 you can use disk drive programmes, you just need an ISO key.
Hope this helps!