So, at this point, I'm trying to decide between Forsworn Armor, upgraded with only 2 ranks in smithing (so I can put enchants on it) and alteration armor. Which is the way to go?
I do also kinda want to play with the fun Alteration spells like Mass Paralysis and Waterbreathing and Telekinesis. So I am really torn, and points are tight.
Blah.

Cloth + heavy Alteration.
Contrary to the post above, Absorption doesn't cause pots and healing spells to fail. Conjuration spells and the "Quick Reflexes" effect when Blocking are the only two things it absorbs, so if you don't rely on either, it's not a problem.
If you don't rely on Conjuration, Atronach stone + Atronach perk would be a great idea for you. Magic Resistance perk (30%) + Breton racial (25%) + Mara quest (15%) means you're already at 70% without any enchants. Toss in 80% Absorption to back that up, and you will completely avoid all sorts of stuff. Not just magic damage, but Dragon Shouts, poisons, enemy weapon enchants, etc. That's something only Absorption can provide.
Breton "pure" Mages are, in my opinion, one of the only class/ race combos for which Magicka Absorption is even viable, because you can get your Magic Resistance so high without enchants. Most other race/ class combos have to sacrifice too much for it, which generally isn't worth it. As long as you don't rely on Conjuration, I say go for it.