The CGA / EGA / VGA thing on your PC back in the eartly nintes is not really related to arcade graphics.
CGS and EGA on your PC looked crap because they were only 4 (CGA) and 16(EGA) color colors on the screen at one time.
Your arcade monitor running in CGA (15khz) mode can dispaly as many colors as your hardware will push to it, so the graphics look great.
To the best of my knowledge there are about 50 games in MAME that require a medium res monitor and about 3 that require a "VGA" high res monitor and those are all fishing games anyway.
So yeah, a CGA (15khz) monitor with an ArcadeVGA card is by far the easiest way to go - that will have you running 95% of all mame games looking great.
If you have your heart set on that medium res monitor there are a few things you should know
1) arcadeVGA doesn't support the 25Khz modes directly
2) most dual mode monitors are not auto sensing, you need to switch em off and remove a jumper to switch between the two modes.
Of course there is nothing to stop you buying the dual mode monitor now and running it in low res mode. It seems like a pretty sweet price - it will do everything a standard res monitor will do, and with a bit of work maybe even more some of the more recent 3d righters like teken 3, VOOT, rival schools are medium res but since mame renders 3d in software for emulation accuracy they might be a bit slow anyway.
That VGA monitor from Happ would also be a good choice for ease of setup
But the thing to remember is that a medium/vgs creen will not make your standard res games look any better than they do in standard res.