honeybasil, I image that the khaki part of the canvas fabric indicates the color. Of course a solid lighter color will show soiling and being a cotton/natural fiber its difficult to clean and even more so after the first cleaning. Because of the protective finish that resists absorption into the fibers has been removed. I always recommend for this type of material is darker colors for a growing family and after any cleaning a soil and stain repellant finish should be applied.
For price / performance its hard to beat a microfiber fabric. Its easy to clean and the better heavier weight microfibers are very durable. A second choice would be a nylon or nylon blend textured fabric. Just be sure the weave is close to the same going weft and warp. But this fabric can be more expensive, but you can find discounted at some fabric outlets. A step up is a commercial grade of corrected top grain leather. Its extremely durable and easy to clean. Yet quite comfortable too.
All in all, most is to get a solid hardwood frame no less than 1" thick that is double doweled and glued joinery. Not a plywood frame that has notched out joints and stapled together. Thats so commonly miss-represented as a mortise and tenon hardwood frame. At this price point the 8 gauge sinuous no-sag spring seats and backs is the best and will last the entire life of the hardwood frame. This type of spring puts a lot of pressure on the frame, so it requires a solid hardwood frame. This is where these sinuous springs have a bad reputation, because they are inexpensive to make they are often used in thin plywood frames. These frames are not strong enough and the springs will break loose where they are attached to the frame or they will actually cause the frame to break.
Seat cushions of a high density foam of at least 2.0 density cores and the wrap/toppers should be a softer foam wrap of the same density. A polyester fiber wrap will quickly break down and is not recommended.
Knowing who the actual manufacturer is and they have they name and information about them on the sofa. It the retailer cant supply this; then walk away.
I hope this helps.

Here is a link that might be useful: quality sofas for less than $1000

Thank you for your very detailed answer! I'm just starting this process, so this info is very helpful!

Consider looking on Craigslist for a good, clean sofa. You can get a lot of bang for your buck if you're patient. Older sofas were made much better than they are now. Find a HEAVY (solid wood) frame, and you can always put the money into recovering it.

Leather. Treated. Not bonded leather. Great for kids and dogs. But it might be hard to find under $1,000. Otherwise I would look for microfiber. They clean up really well.