How to choose Minecraft server hosting: real RAM, single-core CPU, location, FTP access, backups. Plus test your plugin online before you pay for a server.
Judge a Minecraft host on four things before price: how much RAM is genuinely dedicated to you, single-core CPU speed, how close the datacenter sits to your players, and whether you get real FTP access to drop your own .jar files. Advertised player slots tell you almost nothing.
There is no universal number, and be wary of anyone who throws one at you without asking questions. It depends on concurrent players, view distance, how much world has been explored and how many plugins you run. The useful move is to pick an offer where you can raise the RAM later without changing servers or migrating your world.
It depends on what you already know and how much time you want to spend. A specialised host installs the server and gives you a panel, so you start playing quickly. A VPS gives you full control, but Java, the firewall and the updates are yours to handle. Neither is better in the abstract.
Technically yes. Your machine can run a Paper server for a group of friends. The real constraints are elsewhere: your upload bandwidth, having to open a port to the internet, exposing your home IP address, and the fact that the server stops when your computer does. For a private circle that is reasonable. For a public server it is a different story.