Level up. Every time you level up a little thing will pop up saying you hit the next level, read what you've unlocked each time. You'll unlock another island at each of these level: 1, 10, 16, 20, 25, 30. So at max level (30) you can have up to 6.
Only buy the ones that cost gold (primaries). Breed the rest. It depends, if you wanna go for gold, pick dragons that earn a higher gold rate, and belong to a habitat that can hold more gold (For example, a Large Air habitat can only hold a max of 10K, while a Large Earth can hold a max of 75K and is also much cheaper). Ice and earth are the best choices IMO. (Don't waste your time with plant, 500 gold is max so I only have 1 habitat).
Scroll down on this page and there should be a chart:
http://dragonvale.wikia.com/wiki/Breeding The ones that have a line through them are no longer available.
The wiki will answer almost all of you questions:
http://dragonvale.wikia.com/wiki/DragonVale_Wiki
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