Use wood chips for paths.
Mulching with compost will help you achieve all your goals.
Do you have your own compost set up? If you make your own you wont have to worry about all the big pieces and bits of garbage.

I do my own. but not nearly enough for my needs. So, I supplement. Hard to come up with the "browns" and the space to make a couple yards in a SoCal suburban backyard.

Kevin

I would use the compost and save $6 dollars a yard.

I have a browns problem too, so I use a 2 pile system to ensure enough when batch making time rolls around.

I use wood chips delivered to me for free by the local tree trimming company and add nitrogen.

Wood chips, or any other high carbon material (straw) tilled into the soil can cause a temporary Nitrogen deficiency as the Soil Food Web spends time and energy digesting that high carbon material. However, if that same high carbon material is laid on the soil, as mulch, it will not be energetically digested by the Soil Food Web and will aid in holding moisture in the soil, aid in unwanted (weeds) plant growth suppression, aid in keeping the soil cooler, and aid in adding organic matter to the soil.
Many people do till the mulch into the soil at the end of the growing season but there is no real good reason to do that and simply means you will need to spend more money next spring for more mulch material.
This past year around here straw was selling for $5.99 to $8,99 per bale. I have found that straw needs to be about twice as thick as shredded leaves to offer the same results. Shredded leaves and wood chips, in my experience, are about the same for coverage.

I was wondering why you are tilling the mulch in at the end of the season?

I basically cold compost, and there's plenty of live seeds in mine-
My garden would be a million random plants if I left it on the surface!
I always cover my composted gardens with a dry mulch.
I want the worms to drag compost down into the soil, and they won't do it at my place if it's on top.
It's a small space, so a couple of bales of pea straw covers it, and I have loads of Russian comfrey that I 'chop and drop' for mulch several times a season.
I use chipped tree mulch on the perennial areas-I avoid it on annual gardens.

The current issue of Garden Gate magazine explodes some of the myths gardeners seem to hang onto including the one to "never use wood chips from a tree trimmer because they might spread plant diseases"
The mulches I spread on my soil were most often quite dry when spread but they soon became moist as they were rained on and helped hold moisture in the soil.
Earthworms are only one small part of the Soil Food Web that digests and moves organic matter that is on the soil surface into the soil, but they are the most visible. If earthworm activity is low that may indicate there is not enough food, organic matter, in the soil.
Where people till planting beds annually wood chips probably would not be something to mulch those beds with. I never had that problem since not even the annual planting beds needed to be tilled every year and in some beds they were never tilled, simply covered with newspaper and a mulch (sometimes wood chips) and not planted for 6 to 12 months at which time the soil was very workable due to the Soil Food Web at work.