I started breeding mice back in July, well I got the mice in July, but they didn't produce for me until September, but that can be expected with mice that don't know each other.
If your just going to be using the pinkies, you can freeze them straight from the nest. Pinkies are made to be able to withstand suffocation, so freezing is just the easiest way to kill them.
If you end up having too many mice, just freeze off the pinkies or sell them to local petstores or other people that have snakes. If you take the male away from the female for an extended period of time, they may fight when reintroduced, or take a long time to start breeding again.
I keep mine in cages I've made myself, made of kitty litter pans and a 1/4" hardware screen and wood frame top. I would think you could use a 5 gallon tank, but only keep 1.1 or 1.2 mice in it, otherwise it will be too crowded. Oh, and you'll still need a lid. Mice can jump pretty high if they try to.
Mice smell pretty bad, but thanks to some suggestions here, I use alfalfa pellets for bedding (you can get about 20 pounds of it for about $7). The alfalfa masks the odors of the mice. I can usually go about 2 weeks without changing the bedding before the smell gets too noticeable.
I feed them rodent pellets. These can be pretty expensive though (20 pounds for $20). You can just use dog food, but make sure that it doesn't have any red dyes coloring it. Red dyes are harmful to the mice and then also to the snakes you feed them to.
Once the colony of mice is established, you should get pinks about every 19-22 days. Supposedly mice usually have about 8-10 pinks per litter, but I haven't had much luck getting productive mice, only getting about 5-7 babies a litter.
This is just my own preference, but when I take the pinkies from mom, I only take 1/3 the first day, then 1/2 of what's left the second day, and then the rest on day 3. This way the mouse mom gets a little bit of experience mothering and you don't freak her out by taking away all her babies right away.