I've been working on remodeling the basement for a woodshop for nearly 2 years at this point (did a lot of other stuff too, like a drainage system and earthquake retrofitting). I just FINALLY got the lighting going today!
I was also very concerned about making my shop feel like a stale hospital with white walls. But I ended up painting the walls and ceilings a semi-gloss white and it was such a great transformation. I haven't regretted it one bit honestly. I really recommend going with white.
Think about noise, dust, and finishing fumes getting into the house. I spent a lot of time insulating, putting dampening matting on the furnace ducts, and generally sealing off the ceiling from the house. At the very least, get yourself some "Great Stuff" expanding foam and go nuts closing off holes to the house. I ended up putting MDF paneling on the ceiling (safety nazis: I now that drywall is more fire proof, but MDF is a big improvement over the old exposed joists). I liked the MDF for a few reasons: 1) I can drop the panels fairly easily for access to the utilities that service the house upstairs (although I did caulk the gaps), 2) low ceilings will eventually get hit by a carelessly swung piece of wood, and it will resist denting much better than drywall, 3) you can hang things from it (within reason!) without having to worry about finding a joist.
Definitely make sure you don't have any moisture issues. Not sure what part of the country you're in, but in my parts, just about everybody has wet basements unless they have a drain system and sump pump (which I had the joy of installing as part of my project). As part of this, don't underestimate the moisture that is evaporating through your slab. If you have a musky smell in there, you most likely have moisture wicking through your slab and evaporating in the air. If you don' want to epoxy the floor, then you can instead just grind the floor a bit and spray down a siliconate sealer. it will leave the concrete looking like nothing has been applied, but water just beads up on it. this means way less moisture will make it into the shop air.
I did a bunch of earthquake retrofitting as well, which prolonged my project. You might want to consider addressing any potential structural issues before going too far. It definitely adds time and effort, but it could pay off in the long run.
Good luck!