It depends on your goals of course.
Personally, I use Proxmox on a couple machines for a couple reasons:
- It's way way easier to backup an entire VM than it is to backup a bare metal physical device. And when you back up a VM, because the VM is "virtual hardware" you can (and I have) restore it to the same machine or to brand new hardware easily and it will "just work". This is especially useful in the case that hardware dies.
- I want high availability. A few things I do in my homelab, I personally concider "critical" to my home happiness. They aren't really critical, but I don't want to be without them if I can avoid it. And by having multiple proxmox hosts, I get automatic failover. If one machine dies or crashes, the VMs automatically start up on the other machine.
Is that overkill? Yes. But I wouldn't say it "doesn't make sense". It makes sense but just isn't necessary.
Fudge topping on ice cream isn't necessary either, but it sure is nice.
The point of purchasing a registered domain name and connecting it to a public DNS server is to make it findable from any Internet location. If you only ever want to use the domain name internally, you don't need to have a public domain name and you can make up your own internal domain name that is served by your local DNS. To avoid future conflicts with public domains, I'd probably use a TLD that doesn't exist (e.g. not .com or the like).