Short answers.
HOW MANY CLIENTS DO I NEED?
Enough that recurring revenue covers your costs and time. That is usually more than people expect.
SHOULD I OVERSELL?
Modestly. Everyone does. Aggressively, no.
WHAT SHOULD I CHARGE?
Enough to cover your support time, not just your reseller cost.
DO I NEED A BILLING SYSTEM?
Not initially. Adopt one when manual invoicing takes more time than it costs.
DO I NEED PRIVATE NAMESERVERS?
Not technically. They look more professional and are worth setting up early.
SHOULD I OFFER BACKUPS?
Decide and state it. That is what matters more than which you choose.
CAN I HOST MY OWN SITES ON IT?
Yes. Keep them in separate accounts, not mixed with clients.
WHAT IF A CLIENT'S SITE GETS HACKED?
Contain, inform, clean, close the entry point. And sell maintenance afterwards.
HOW DO I COMPETE ON PRICE?
You do not. Compete on being reachable.
WHEN DO I NEED A VPS?
When you need control shared hosting cannot provide, and you want the responsibility that comes with it.
WHAT LIMITS MY GROWTH?
Your time, almost always. Not your allocation.