Although I traditional run games for 5 - 6 players, this summer I'm running a TTB campaign for 2. For me there is something about Malifaux that makes things more personal and horrific in the small group dynamic (options become limited, resources a little more scarce, and fate steps more intimate). That being said however, the Penny Dreadfuls are definitely geared toward groups larger then 2 but with a few modifications would work fine.
As far as the books go I think you're fine with simply using the core books, however the expansions are definitely worth the price!