RAID Vs. JBOD Vs. Standard HDDs

At first I was thinking about just putting in a bunch HDDs. Then I started thinking about doing a RAID array, looking at RAID 5. However, some of the stuff I was initially told about RAID 5, I am now learning is not true. Some of the limitations I'm learning about: RAID 5 drives are limited to the size of the smallest drive in the array. And the way things are looking, even if I gradually replace all of the drives with larger ones, the array will still read the original size. For example, say I have 3x500gb drives in RAID 5 and over time replace all of them with 1TB drives. Instead of reading one big 3tb drive, it will still read 1.5tb. Is this true? I also considered using JBOD simply because I can use different size HDDs and have them all appear to be one large one, but there is no redundancy with this, which has me leaning away from it. If y'all were building a system for this purpose, how many drives and what size drives would you use and would you do some form of RAID, or what?