which wildcats are you a fan of? always have a soft spot in my heart for a fellow wildcat fan :)
1) you should take at least 1, maybe 2 walkons a season. this is VERY important as a new coach, for a few reasons. first, the extra 15-30K you get in recruiting to explore for diamonds in the rough, and also, to battle for the few good players you might have a chance at, is invaluable!! you aren't going to lose early entries, so having 12 players is FAR less important than this 15-30K. also, trying to fill scholarships is an early goal of many new d1 coaches, and it causes them to get into this rut of signing sub-par players. the d1 players you can sign easily are a dime a dozen. you need to be reaching for players who can actually stand out, and help you to make the post season consistently.
so, that said, cut away! often in season 1, at a serious rebuild, ill cut 2-4 guys, and then work to instantly instill a minimum quality standard, in quantity. for example, my first class at south carolina (b-), i signed 5 guys, but none of them were really that hotly contested. i had to spend some money fending off lower end schools (like mine, not much lower, i just mean not the big boys). those 5 guys were all able to compete in their own way - one big was really solid defensively and was a good rebounder, my pg was great at running the point, that kind of thing - but i didn't have to reach and battle A prestige schools, like i did the following seasons.
again, just to reiterate, dont aim too low! a walkon is a HELL of a lot better than having a ****** player who cant compete, for 4 seasons! anything up to 4 walkons can be taken in stride and in some cases will even benefit you (think about how much better players you could get if you signed 2 players on a 6 man budget each season - that is sustainable and gives you 45K per player, with no bonus money - compared to the traditional 15K. with lower end BCS bonus money, its even better - you might have 60K per player instead of 20K).
2) the key to successfully building non-elite d1 programs is recruiting players who specialize. DO NOT recruit a guy who is decent at everything. you need guys who bring strength to the table. for example, you are a million times better to have 2 bigs, one who has 1 lp and is strong reb/def wise and another who is moderate on def, and a strong scorer - than to have 2 bigs who are equally good at offense, defense, and rebounding. its even more important at guards, because guard offense is so important (i would recommend most lower end d1 teams to just focus on reb/def in bigs, try to get yourself some 60 ath/90 reb/80 def type guys, or better. even bigs like that, rated 550 and sucking in everything else, can compete).
that said, one of the most critical roles you have to fill is your primary scorer, who should be a guard. you don't want a god awful defender, but you have to be willing to have a couple weaker defenders to get a couple strong scorers - if your guard is only 75% as good on defense, but can score 20ppg at high efficiency, its really going to allow you to more than make up for his defensive weakness by finding defensive specialists who can just put up 5ppg or whatever. however, those high scoring guards are not that easy to find (probably the best place to spend the most money getting one), so always be on the look out. other than that, id split things up - try to get a guard and a big, something like that. small forwards always come far far after getting your guards/bigs in line, in d1.