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You talk like there is not in between containers and VMs. You can use both.
What he said. 👏
No, that would make no sense and is obviously not what i meant.
But you could separate the arr stack from things like pihole with a vm. For example you could pin one thread to that VM so you will not bottleneck your DNS when you are doing heavy loads on the rest of the system. This is just one example what can be done.
Just because you do not see a benefit, does not mean there is none.
Also, VMs are not "heavy" thanks to virtualization technology built into modern hardware, VMs are quite light on the system. Yes they still have overhead but its not like you are giving up big percentages of your potential performance, depending on the setup.
I agree with this, though I think a lot of people don't differentiate between operating system containers like LXC provides and application containers like docker provides.
Sometimes you need a VM. They're not overkill, just useful for different things.
Examples; Running Windows, Running OSX, Passing through hardware to use isolated from the host (PCIe devices, USB, etc), Linux guests where you need a full kernel and permissions (for example to run Docker without issues caused by being nested inside a container).
VMs don't really have much more overhead than a container in most use cases too. For example a VM with debian installed uses about 30MB of RAM.
The benefit of splitting services between VM's is the same as it always has been: I can break one service without breaking ALL of them. Containers are an improvement over native installs but they do not solve this problem completely.