If you plan to just host websites, the VPS in most cases, is plenty of power. People can use dedicated servers for other kinds of server environments, like streaming/game servers, etc., but it usually takes a lot more manual work to set up. The VPS can be fully managed by us, and we can help support it a little easier if things with the overall setup get messed up for any reason. And yes, you don't have any disk space limits on the VPS, only the physical RAM usage and CPU limits you set with the slider in your panel for it.
Hope that helps. If you have any any further questions or concerns, please feel free to let us know!