Our DD was small (25th percentile) and by about 8 months she outgrew it as a travel crib. In hindsight it was a complete waste of money as we only used it 6 or 7 times and then we needed the full size pack-n-play. So if you want to use a pack-n-play when your baby gets older, you will wind up needing to buy a bigger one sooner or later. That being said, you may want to consider just buying a bassinet (assuming they are the same price as a Graco lite, I'm not sure as we got a hand-me-down bassinet) and then the larger pack-n-play for traveling and later use. I think the pack-n-play mattress is fine, but I'm sure DD's bassinet mattress was more comfortable.
To answer your other question, the bassinet feature of the Graco lite is up to around 15 pounds, and then the baby sleeps on the bottom.