How would I go about creating a hairband and having it interact with the hair after it’s been styled? Or should I create the hair band first?
Very difficult. You may get the hair to collide with the hairband (with more or less usable results, as hair collisions are buggy), but making the hairband collide with the hair…, rather not.
I assume you are talking about hair particles, not hair faked with a texture on (simple) mesh. For the latter case there are options, e.g. using softbody sim.
I guess what I mean to say is that I’m curious how someone sets up hair to interact with shoulders, hair accessories, etc. I am using a particle system.
Getting hair to bump against the head (or rest of the body) is more or less doable. The hair collision handling is buggy, but it seems it can be made to work well enough, when in the softbody ‘outer’ value is set large enough. Unfortunately is has the effect that the collision happens a quite visible distance away from the mesh. So you might have to create a mesh ‘inset’ by the right amount, e.g. by using the shrinkwrap modifier.
About interaction with hair accessories, I have to admit being quite lost myself. I suspect there isn’t a sane way at all to do it with the current features of Blender phys sims. As a general rule, currently there is no two-way interaction between different sims.
Could be wrong to say it is completely impossible, as someone might know a clever trick, though, but likely it will be of limited applicability.