Yeah, its hard enough to get started without ever getting any decent projects to do. Kind of a chicken and egg situation.
It sounds like its a tricky political situation: often is, but you can just use another name or handle if you dont like the material. The important thing is that you can buy better gear with their money.
Generally, if the band are paying actual money and then give me a ‘sound’ to record, I will run with it and try to extract what I need out of it. Its their vision after all, and its good training for you. If there is too much fx level on guitars, maybe ask for the fx to be panned to one side only so you can compress the dry guitar and add it back in without compressing the fx.
Always remember, once they’ve handed over their money, they 100% own the recorded material (mixes, stems or whatever you did to it) - its not yours anymore.
If you get to mix it, you may want to give them the stems, I would print the FX onto them, then they can do what they want with it. It will save you from the constant remix requests from each member of the band and the project wil be officially finished (from your point of view).
The most important thing is to get a BALANCE out of it all. Get things panned as far as you can and get EVERYTHING to support that vocal.
The musicians will try to get you to do stuff that upsets that balance, but thats ok - they can deal with it themselves later - i.e remix it themselves. Try not to let them lead you too far astray in YOUR mix
You will have to record a whole range of random stuff before you really ‘get it down’ anyway. Just make sure you make sensible decisions along the way.
Find a way to trust your monitors/headphone combination and learn how to mic instruments without introducing too much proximity effect. Dont worry about spillage (on real drums etc), just EQ it so the spillage sounds good, or ask on here for help.
If they want to re-record the drums, let them. Its probably quicker than trying to fix garbage.
If you always worry about what other people might think, you will get nothing done.