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Here's what I've heard:
Raves are big parties, usually all night, usually all ages (I think the age range of the folks who show up is usually something like 14+). The really massive raves I've heard about are often capable of holding several thousand people (BIG ones like Innercity or Trance Energy in Amsterdam are something like 30,000 people), while the smaller ones can be at several-hundred capacity venues.
As for drugs: raves don't serve alcohol, that's why they're all-ages
Usually water and energy drinks only from what I've heard. I dunno how much water and stuff is but I expect it's probably the same as a club, around $4? There usually are a LOT of people doing drugs at raves, most often they use e, that's why it's not uncommon to encounter fucked-up people who want to give you a hug You're right that the media exaggerates the dangers of raves somewhat, but it's true that there are a ton of drugs floating around.
In my opinion, raves are generally somewhat more about the music aspect of things than clubnights are. I mean, a lot of guys go to clubs solely to try and get laid, I don't really think ravers go to raves for the same reason. It's more like to go and just have a grand old fuckin' time.
And oh, beware of the candy ravers, they're the ones you always hear about who are like 16 and show up weighted down with about 100 pounds of candy on them, whistles, glowsticks and pacifiers. 
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