First this question cannot really be answered fully without legal consultation.
The short answer is an LLC is probably a good option unless the revenue is going to be very high (i.e. 1 million USD or so) because of LLC's pass-through taxation.
Whether or not you are going to do business beyond the Chicago area is not really relevant to the decision of where to incorporate. Although incorporating Delaware offers certain benefits such as flexible laws, inexpensive registration fees & more matured commercial law (particularly case law), in my opinion, it is probably more convenient and economical for startups to incorporate in their principal place of business.
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