Electric guitar wormhole?

Well that depends a lot on what sound you're looking for.

If you're just a hobbyist you can most likely get by with a small modelling amp or some modelling software and a tablet or laptop. The amp I use for most of my practicing is a Fender G-DEC 30. It can emulate just about any amp and effect you can think of. There are a lot of similar ones on the market for reasonable prices.

If you want to go to the next step, then get a tube amp and a handful of analog pedals. At minimum you'll probably need one or two distortion pedals plus whatever other effects you might want to use like chorus, echo, phase shifter, etc. You may need a reverb pedal if your amp doesn't have a reverb tank. I'd also recommend an EQ pedal and a tuner. My effects chain is:
Volume -> Wah -> EQ -> Compressor -> Distortion -> Chorus -> Volume -> Amp
|-> Tuner

The first volume pedal has two outputs so one of those goes to a tuner and the other goes to the rest of the pedals.

It's a deep rabbit hole but it's fun. :)

I got most of my stuff from eBay or Craigslist and I tend to avoid Guitar Center like it's radioactive. But with an iPad and a good modelling program, you don't even need an amp. Then one day if you do decide you want to invest in some pedals you'll know which ones you want from having played around with them on your iPad already.

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Or better yet is there a piece of gear that can get you there mostly?

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AxeFX will do everything that you described. It is pricey but definitely cheaper than buying all the pedals and amps you could want. A cheaper option is the Line6 Pod HD Pro.

I practice thru a little fender champ with an 8 inch speaker. when performing I use a fender hot rod deluxe tube amp. my pedals in order are tuner, distortion, blues driver, and delay. if I need some reverb I just use the amp reverb.

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How much equipment is needed and how much money to get the sound or a facsimile of the sounds that you wanted?

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That is mostly in the hands and in the mind man. You have got to put SO MUCH WORK IN to get to sounding and emulating tones of the greats that you hear. I have been obsessed with SRV since I was about 7-8 years old and have worked a lot to get to where I can sound like him (his style, not sound like him necessarily), but the majority of it came from me putting the time in and knowing where to put the passion into playing. A bend sounds different when you put your heart into it than just looking up a tab and playing the lick. Look at the opening lick in "The Sky Is Crying" for example. That can take years to master, and a lot may never even get there no matter how much they practice. You have to have talent.

As you progress, gear then begins to matter more so that you can get the most out of your talent level, which you will only truly know where that line is after putting in a ton of time. A great player can make a $150 Squier Strat through a $100 Marshall MG Combo shite on itself, and a crappy player can make a $5k Les Paul R9 through a $3k Bogner Ecstasy sound like shite. You swap the two scenarios and the great player will still sound great and the beginning player will sound like shite.

To answer your question directly, I think $1k can get you a solid setup that would allow you to get in the ballpark of whatever tones you are shooting for IF you put the work and time into to becoming a really good player.
Example gear list if you're a very good player and are playing in a top 40's band -
Fender Standard Mexi Fat Strat on ebay - $400
Fender Blues Junior 15w 1x12 combo on ebay - $375
Fulltone Fulldrive 2 pedal - $115
Dunlop Crybaby Mini Wah - $99
This would be versatile enough to cover almost anything.

Let's say you have a $1500 budget. I used to be of the belief that you should spend more on the amp and skimp on the guitar but recently some incredible sounds bargain priced tube amps have come out that will blow you away.
Fender Bassbreaker 15w 1x12 combo - $650 (holy shite, this little guy)
Orange OR15 Head - $700
Victory Red Dwarf - $900 (more of a boutique company, but this head is amazing. I have one)
I would then spend the rest on the same Fat Strat as above and buy more pedals like a nice Delay/Reverb and some modulation Chorus/Flange and a Compressor.

My current rig that I bring on stage -
Victory Red Dwarf Head
Avatar 2x12 Speaker Cab with Splawn Small Block Speakers
'07 Gibson Les Paul Standard
'05 Warmoth/Fender Deluxe Tele coiltapped
'05 Fender Standard Mexi Strat w/Fat 50's
Budda Wah
Analogman Prince of Tone
Fulltone 2b booster (w/compression)
Boss Tuner
Effects Loop on amp has -
Earthquaker Devices Organ Emulator
Fulltone Mini Dejavibe
Dunlop Carbon Copy Delay
Digitech Hardwire Reverb

That can cover anything from Hendrix, Alice In Chains, Freebird, Uptown Funk, Let's Get It On and everything in between. That's about a $7k setup (I cant believe that, I've never really added it up) but could I do a gig on less? Absolutely. This has just been acquired over 15-20 years and I feel maximizes my playing. (and I like gear and I don't have kids so I can be selfish right now )

All of that was said to get to the point that you can reasonably emulate whatever sound youre looking for on a very modest $1k rig or even less.
Practice > Talent > Quality of gear

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It is about 3% gear, 30% innate musical talent (ear, timing, rhythm, feel) and 67% practice.

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Well shite, you said it better than me in about 1300% less words

Thanks for all the input.

Currently I have gone only acoustic. Don't even have an amp. What I do need not be amplified. Sometimes the pick is too much amplification.

One day I intend to get a Dean Markley soundhole pickup. They are cheap and are good enough for John Prine, so who the f--- do I think I am to differ.

I just know that I walk into any guitar shops (GC mainly) and feel lost walking through the electrics. One day I may have a couple beers with lunch and decide to plug one in, and God help all who shop that day.

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Fulltone Mini Dejavibe

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I just got one of these and love it. Great swirly phase shifter/chorus Robin Trower effects. In fact I'm a big fan of Fulltone pedals in general. Pricey but worth it, especially if you can find used ones.

I have a Boss tuner and a Big Muff Pi and those are my only 2 pedals. Oh wait, I'm only a bass player. frick

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Oh wait, I'm only a bass player. frick

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Gotta admit, this drew a chuckle.