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Os: Maybe a bit biased here but I don't think vms are really effective when you have limited resources. Virtualizing 16 cores yes but otherwise not really... My reasoning is the second point I'll make. USE DOCKER. Docker can be very efficient with resource usage as you can set limits to it. Normally I suggest going kubernetes if you are interested but that would require more servers. And yes I personally use github for my homelab (https://github.com/Michaelpalacce/HomeLab). Very important tho: do not store the data you produce ( like database files on git ). Store configuration and take a lot of notes. It would be good to also look into ansible or something like it for automation of your infrastructure. But anyway. Ubuntu server with docker compose should be perfect as a beginning and even later on.
I also Highly Recommend Docker and I used https://www.smarthomebeginner.com/ to learn Docker for a home server. They cover great Appa for home use
For automating unlocking of encrypted drives, look into tang . Here is a red hat guide on setting it up. You will want to be running this on another device on your network, i run it on my router with openwrt since its a local device thats on 24/7. Basically it will unlock your disks as long as your server is on your network, so if your machine or drives are stolen or removed from your network they will just be encrypted as usual. Obviously use a strong encryption password.
Once you get basics of docker-compose, this has value of gold to you.
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