Fuel-efficient, reliable, fun to drive, Colorado

No on the Honda Fit, huh? A Matrix/Vibe will be similar; slightly more powerful but heavier. You might like the feel of a Scion XD - about the same size as a Fit, but has a bigger engine (the Matrix/Vibe/Corolla engine). Based on past results, a Mazda will probably start to show some body rust at 6-10 years old in your climate. Maybe they've changed their metals coating processes since then, but I've never seen any kind of technical analysis that would show that. They are nice cars, though. On the Subaru front, you will definately lose some MPG with them, but they are nice cars; the Impreza being smallest/cheapest and the one to get unless you need more space. If you don't like any of the smaller/better mpg cars, the Impreza might be your best bet. You can get the bigger engine in a Matrix, but once you do that, economy begins to favor the Impreza.

Subaru Comments here:
I would recommend the Forester and/or Forester XT. Its bigger, but benefits from a slightly larger engine which would help in the mountains. The XT is the turbo and has a lot of pep, but is much less fuel efficient and might have higher insurance rates. I own an Impreza and while I really love it, I don't live in the mountians and can understand your friend's husband's comment. There is a WRX with an automatic this year (just like the Impreza only turbo), but its not available in a hatchback :( and has the same downsides as the Forester XT.

Finally the there's the XV Crosstrek. Great ground clearance, space and economy, but it has the same engine and transmission as the Impreza so its going to have the same issues on steep grades.

The mountain west is one of the places where owning an SUV might not be a bad idea if only for the larger displacement and likely 4WD/AWD.

The problem with Mazdas was they weren't properly sealing where two metal panels were crimped and welded together, especially the inner and outer rear fenders. They claim to have fixed this around 2007, and those that age and newer don't seem to be rusting, at least not yet.

The Mazda SUVs have cladding around the wheel openings, which should help keep salt out of the welds. I'd suggest a CX-5 with the 2.5 engine offered from 2014 on, but it probably isn't possible to find one under $18k.

The Vibe/Matrix have a tinny feel and awkward driving positions, so I'm not a big fan. With the CR-V, I don't care for how it rides or handles.

Subarus aren't bulletproof, especially as they age. With the Forester, the 2011s have been prone to valve cover gasket leaks, so I'd avoid that year. The 2015 Forester is much more efficient than the 2009-2014, but will be outside your budget. So maybe try to get an extended test drive in the mountains with the Impreza to see if its performance is sufficient. If it's not, a 2010 or newer Outback could also be an option.

A Volkswagen Tiguan seems a good fit for performance, handling, visbility, and even fuel economy. Reliability is the question mark. Those 2012 and newer have been much more reliable than earlier ones in our survey, but it's not yet possible to say whether they'll remain reliable as they age. Rust shouldn't be an issue, as VW's rustproofing has been excellent for years.