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VPS: when a server with root access makes sense
A VPS is a virtual machine with its own operating system, root access and a fixed IP. It makes sense when your application needs settings that shared hosting does not allow: your own services, specific ports, Docker or Windows Server.
Physical server or VPS?
A physical server charges for the whole machine, idle capacity included, and ties the contract to the hardware. A VPS gives you the same control over the system with more flexibility: more memory is a plan upgrade, with no hardware swap.
Start smaller if it makes sense
If the workload is still experimental, start with the G1 plan and upgrade as the project grows. To run several servers, compare with the Virtual Datacenter.