Some great advice already, and you're heading in the right direction Katie, using your instincts to guide you.
I've bought from a back street breeder before, and most of them are horrendous, frankly. However, it wasn't the cat's fault, and he needed a home as badly as any others - if he hadn't been sold to us, he'd probably have ended up on the streets anyway, but I think you have to be prepared and know what you risk taking on in those circumstances.
As Gill said, none of us want you to go through another heartbreak like Indie's loss unless its because your cat has died of old age after living a long and happy life with you and your OH.
With the exception of Westgate Ark, where we've had Moray from and the girls, I haven't had very good experiences with shelters either when it comes to cats - I've had some cracking dogs from rescues, but with regard to cats, have found rescues very hit and miss. Like everything, there are good and less good rescues operating out there.
One point to bear in mind is that the current owner may not be willing to let a kitten be taken for a vet check unless you leave a deposit, or pay in full upfront. That may make it less easy for you to get your money back if there is anything wrong. That's less likely to be a problem with a rescue, but you never know. Ask what their policy is on vet-checks, and that way you not only show that you're responsible, but you can flush out any potential hostility prior to going to look at any litters
Nic had a near miss when she was looking for Chester and Beau - she'd been looking at getting a cat from a woman who was very off with her when she began asking relevant questions, and Nic realized - like you - that something didn't feel right about the woman's set up, so she looked elsewhere.
My advice would be, wherever you get your next cat or cats from, check them out first, then make your decision.
Pedigree breeders come in for a lot of stick, and like everything else, there are good uns and bad uns. I do think however - and same applies to dogs, horses, cattle etc that if all pedigree breeders are tarred with the same brush and hounded out of the picture, we'd lose most of the world's unique and magnificent breeds of dog or cat, and that would be tragic.
The beautiful Norwegian Forest Cat almost died out before careful breeding plans were revived. On the flip side, the modern Siamese is almost unrecognisable from the Siamese of 40 or 50 years ago.