For short trips, there should be enough room for all but the largest dog to lay down in the hatch area but I wouldn't want to keep a big dog cooped up back there for very long. A lot depends on how well the dog handles cramped quarters - some do better than others. Also keep in mind that it's liable to be quite warm under the rear window when the Sun is out.
I bought a cheap seat cover for the passenger seat and my dog (Australian Cattle Dog, approx 35 lb) rides there. The ppl that clean my car complain about the hair. I guess I should have gone with a car that doesn't have an all-black interior.
I can't be much help as far as breed choice goes but I'm very glad that you care enough to find a breed that fits your lifestyle and are not basing your decision on cuteness. There are several web sites that can help you select a breed.