Agree with kalel33. Canon's EF 85mm f/1.2L II is one of the best Canon lens for portraits. You can look at the "Just some photos to share" thread from jump at the top of the forum, he uses this lens and took some really great portrait shots. But this lens is certainly not cheap.
Since your budget is tight, you should still do well with the 85mm f/1.8 lens. For small group photos, the 50mm f/1.4 lens is pretty good. You have to be careful if you use wide angle lens (for large group or travel shots), getting too close or slight misalignment of your lens or placing subjects at the edge may give your some unwanted distortions.
Personally I use the EF-S 17-55mm f/2.8 (on the 30D) and the 24-105mm f/4L IS (on the 5D Mk II) for general family portraits. And I use the EF 70-200mm f/2.8L IS for close up head/shoulder portraits. I use zoom lenses for convenience.
As kalel33 said, lighting is the key to glamour shots. Equally important is the background.
Lighting can cost as much as your camera and lens. Natural light is free but you may not have perfect natural light all the time (most of time you don't). For indoor studio type portrait, there is broad and short light, also Rembrandt light. Hair lighting can add glamour to the shot, and carefully placed shadows can add drama to the shot. Using gels to change color can add atmosphere and drama to the portrait. Learning how to manipulate lighting takes time to learn, but also need proper equipment. For a nonprofessional like myself, I usually use a 580ex II speedlite (and a second 430 ex speedlite) with a Stofen or Gary Fong lightsphere when I am traveling. If you are more serious, then you can consider a Honl snoot and Lumiquest flash softbox. A more serious semi-pro or pro may use a Q flash or Elinchrome quadra with an Octabank softbox. The Elinchrome quadra can give a studio quality flash anywhere you go, it has a portable power source.
For indoor lighting, I often use my set of Alien Bees strobes (these are the same people who make the White Lightning line), with umbrellas, softboxes, strip lights, beauty dish, grids, gels, etc. Most of the time I got lazy and just used the umbrellas and softboxes. Alien Bees have high quality strobes at reasonable price, a very good choice for the nonpros.
So for a tight budget, you should at least shoot for 2 bounce flashes (with at least one master flash that can control the other flash). Getting a Lumiquest softbox or a Gary Fong lightsphere can soften the light and get better result. Getting a Honl snoot can allow you to focus and place light on the facial feature you want to emphasize, increasing the dramatic effect. Later when you have some extra money, you can consider getting the Alien Bees strobes, which are basically monolights, mostly are used indoors. If you need to use strobes outdoors or on outside location without an accessible power source, then you will have to spend some extra cash on the Elinchrome quadra set.
Choosing the background can make or break your photo, so choose wisely and carefully. Outdoor when I cannot find a nice background, I will try to use a wide aperture (shallow depth of field) to blur out the background. The closer you get to the subject and the longer the focal length of the lens, the more blurry the background. But in bright daylight, this is not always possible, wide aperture may overexpose the photo, so you may need to get a neutral density filter to get a shallower depth of field in broad daylight. On the other hand, when you have a nice background (beautiful/interesting scenery or a background that tells a story or add character to your subject), then you may not want to blur it out. If chosen carefully, a background can greatly enhance your portrait. It can add character and atmosphere to the shot. So pay attention to the background and choose your depth of field wisely.
For indoor glamour shots, backdrops is an essential feature. A good backdrop from a pro photo shop can cost a bit and bulky to store at home. I usually use the collapsable backdrop with solid colors. For more fancy backdrops, I use chroma key (green screen) and digital backdrop. This way I can have hundreds of backdrops and props without wasting space in my home. Lighting is very important in doing chroma key shots. There are some very good free Youtube instruction on how to do chroma key. If all these are still too expensive, then you can go to the local linen shop to buy some non-reflective fabrics for background.