What they're saying is that most of the time, memory is the bottleneck to good database performance. So pay attention to the amount of memory that you think your application queries will need, not the CPU time they require.
I think this is dependent on both your own use and the vagaries of your shared hosting neighbors. I depend on caching of dynamic content as static pages for my performance so I don't do a lot of hand-wringing over database performance.
DNS issues, if they affect your webserver, will affect your application. That said, strictly speaking since you get a local running copy of MySQL, DNS problems won't affect your application's ability to access the database. The fact that MySQL is local will also improve performance.
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