I'm in Business Informatics Co-op (the Business stream of Comp Sci) so I'll try and answer some of your questions.
1. The program is competitive in terms of admissions yes, I believe somewhere around 900 apply and 50 get in, but the main reason the program is so small is because of lack of support from the Engineering faculty. Don't get me wrong, they treat their Comp Sci students well, but Computer Science is not a big part of what McMaster is known for, and they focus more on engineering.
2. Comp Sci is a great field for jobs, so there are good opportunities everywhere, whether it's McMaster or UofT SC. That said, most tech jobs will not be in Hamilton.
3. Comp Sci at Mac has been around a long time, looking at the 1978 course calendar I see Comp Sci listed:
http://registrar.mcmaster.ca /CALEN...78-1980web.pdf The Faculty of Engineering has probably been around for a century, so that's really not it.
4. In my opinion it has a great reuptation, as a result of McMaster's great reputation in general and that of the Engineering faculty, though Comp Sci is not a specific program McMaster is known for.
5. To be honest, every single person I've spoken to that goes to UofT SC has either wanted to transfer to the downtown campus or just hated it. Back in the day it was a better university, but I hear that it's been taken over by Scarborough and become run down and gloomy. Of course most people on this forum will tell you that Mac is better, but I can't see U of T SC ranking above Mac for anything to be honest. Of course going to U of T gets you the UofT reputation, Scarborough or not, but it's up to you to choose which university you like better. I'd really recommend going on tours of both if you still have time.
One quick note on the Co-op program: Mac has co-op in that they list it on your degree and have some workshops and a job listing system to help, but they
will not find a job. That's up to you. Many co-op programs elsewhere get much more involved with their students, even going as far as matching students up to jobs.
Hope that helps! Let me know if you have any more questions.