Your reputation can range between 1 and 20 (villain to hero respectively). However, this only covers the affects such a reputation will have on NPC interaction. Or to put it another way, it probably good go higher or lower, but the result will most likely be the same as having 1 or 20.
Any item in a store can be bought if you have the correct money - or you steal it. If your reputation is really bad, then they may not sell to you at all. Or even worse you might...have to find out for yourself.
As for the emeralds, you may be right. I've never explored that option (sad isn't it) so he may have the proverbial ache with you!