Good to see the forums back online
Few thoughts:
Ubuntu 16.04.3 will be supported
almost until 2022 so the project won't be missing much going with that. Based on my own experience, it is kinda messy to do in-place upgrades on servers. I wouldn't do it myself but then again I may not have the skills required to do it. My suggestion is to always fire up a separate box with the newest server version and migrate things over, and finally let the old box go once things are all in place (that's considering only a single server will run the services). There will be much more than just a webserver running in the box (webserver, cache, php, sql, failtoban, policies, backups, etc, etc. and things will likely break during a release upgrade (been there and done that - again, I may not have the skills required and it is always possible to "fix" things on the fly - I just don't dare to do it ever in production boxes for obvious reasons).
The cost mentioned to run each box is going to be a little higher in my humble opinion, although with the community support that can be archived. Also, there is the question whether to go with a web hosting control panel of some kind or just a plain bare metal deployment fully unmanaged (I prefer the later for fully dedicated boxes and services).
LL services are behind Cloudflare, so Cloudflare controls LL DNS which is one less thing to worry about plus a CDN certainly helps delivering optimized and cached files... but there is a cost for that service as well.
I would definitely not host it at home. The infrastructure just isn't there... there are datacenters for a reason. We're talking about a few thousands dollars up-front for no real benefit and a bunch of headaches in the long run.
Cheers all!