Just to add to the already wonderful advice given by Steve -
When you build the half wall (which to me sounds better than a wrought-iron railing) ... I'm guessing you're going to want some base molding. Also, I'm assuming that the floor is up 18" (or so) from the floor of the adjacent room (split level or different level, anyway.) SO - when you build the wall, make sure that it is set back from the edge of the floor far enough to fit the molding AND leave some space (maybe 1 inch) for aethetic value.
i.e. You should make the bottom plate of the wall (the 2x4) at least 2.5 inches from the edge of the floor, if possible. (That's assuming that it looks alright next to the wall it's butting up against.)
The wall will be much sturdier if your measurements and cuts are perfectly square & not shimmed. Nail the frame together tightly. Some adhesive might even be a good idea. Make sure the wall is attached to the floor with long enough nails, hitting the floor joists. Use half-inch drywall, not quarter-inch.