It is plenty. It comes with a small building plate, but my 4 year old ignores it. He likes to build cars and planes and things with wheels. Add sets at holidays and birthdays and you are good.
As for the carpet, invest in a table for him/her. We got a table that was a small dining room table at a yard sale for $10. We just moved so it's sitting on top of some moving boxes until I have the time to "adjust" the height of the table with power tools. It's a great size for the pieces to get spread out. A few make it to the floor, but are easy to clean up.
I think it would be great as it encourages children to build what they have in their imagination not what's in the box. Some small pieces so if it's a young three year old I would just be careful with that!
The question isn't really very clear since Lego City is a theme of Lego sets like Chima, Castle, Harry Potter, and Star Wars.
The Bricks and More set can used used with Lego City sets. The bin has lots of free space to add other sets.