Thank you for your interest, mybusiness! Please find the answers below.

1) There needs to be separation between retail and wholesale options. Easy to do?
Yes, CS-Cart has the User groups feature which allows you to provide some of your customers with access to special categories of products, special prices, shipping methods, payment methods, etc. You can set an unlimited number of user groups in your CS-Cart store and different prices can be fixed for each product in different user groups.

2) Integration with quickbooks. Is this something cs-cart handles or the host?
CS-Cart is integrated with Quickbooks. I will explain how it works - orders are exported as invoices and the export file includes customer information along with order details.

3) Works fine with merchant account and paypal.
There are three PayPal payment methods integrated with CS-Cart: PayPal Website Payments Standard (PayPal), PayPal Website Payments Pro (PayPal Pro) and PayPal Express. And more than 40 other payment gateways.

4) Does an open version handle all this or do I need to upgrade to commercial?
The first two options are not included in free CS-Cart Community Edition.

If any other questions arise, feel free to ask.