For a test system, I'd go with a 16GB Wi-Fi model. If my apps require testing with cellular, then of course I'd invest in that option. I wouldn't pay more than I need to.
As far as screen size goes, that would depend on app type and audience. At work the larger model is what gets distributed and we're doing business apps, so I appreciate seeing my creations on the same size panel. If I was writing a game that required detailed touch accuracy, I think I might want the mini. My thinking being that if such a game can be played well on a smaller screen, it should play fine on the larger screen. It would be interesting to hear from someone who has done that. 🙂