As for the price, I did freelancing online. When I first started, I offered really cheap services, and only a single person contacted me. But when I increased the price, I started getting more responses. Still, that notebook prop is genius. Guess I'll have to work on my "jargon mask" too ha
BUT... start small, make sure you can do the work at a professional level before you charge for it. It's OK to do a few for free... way less stress than taking their money. Do a few trial runs... get comfortable with the work. Your confidence will grow and then you'll start commanding industry-standard pay. The money does not matter at all right now, you need practice and references.
You can always do work that is in a gray area, or clearly out of scope of the contract, if you want to be nice to the client. The contracts are for clients that you don't want to be nice to. They are levers you can pull to get the client back into a manageable space. If you don't give yourself a lot of levers, you're left with just "walk away" when the shit hits the fan... and typically that option doesn't include getting paid.
Even for "simple" projects now my Statements of Work are 25+ pages. Templatized as best I can, and all reviewed by a lawyer I trust. I don't sign contracts that clients send me, without stipulating that if that contract and the one I sent over are ever at odds, then the contract I sent over wins. You have to protect yourself, especially as a one-man-shop. You can't afford to get bogged down in shitty squabbles, so like with most things... "a stitch in time saves nine" here. Longer, more explicit and detailed contracts save you time.
In terms of what to charge... totally depends on the situation (what services you're offering, who you're offering it to, and the market you're in). I don't generally think people are afraid of paying too little... certainly like $25 / hour -- most SMBs would love paying something like that for the work, and it's about what you'd make hauling sofas and moving boxes around... just a lot easier on your back. You can come off as very high quality, and still have a low price... my guess is you aren't instilling confidence in your presentation. Easy to fix... take a public speaking class, dress a little nicer (suits never hurt), and carry a notebook (http://www.staples.com/Staples-Composition-Notebook-College-...) -- this gives people confidence to see you're an active listener and making a to-do list of action items (http://lifehacker.com/5575748/best-to-do-list-manager-paper).
Spend an hour on Yelp generating a prospect list... find all the local businesses that use WordPress, practice your elevator pitch, then clean yourself up and go walk around asking to speak with the manager.