can't speak to the FAA (or INS) legal stuff but if you have to get to the FAA FSDO it's actually in San Jose 50 miles south of San Francisco.
The Bay Area has an abundance of airports and flying clubs. Closest to SF proper are San Carlos (20 miles South) and Oakland (10 miles East), each with a couple of good schools. Both close to or in Class B and C airspace.
Rates are around $70-90/hr wet in well maintained Cessna/Piper/Katana type stuff, and several have taildraggers if you want to see what your feet are made for...
A bit farther afield are Napa County and Sonoma County (recently renamed Charles Schultz after the eponymous local creator of Peanuts) if you want to stay in the wine country region and take advantage of less cluttered controlled airspace.
The instructors tend to be young airline captain wannabees but are, for the most part, well scrubbed and behaved.
Have fun!
