typically you only need one power supply to run it, once you move to redundant power you can use the second one in case the first one fails. when you plug both in it will just balance across both until one fails.
in my opinion, hardware should only be hypervisors that run virtual machines, then you can provision VMs, similar to using VPSs. going this route you will need a vga monitor for initial setup, eventually everything is done over the lan with a web ui or ssh.
i use proxmox which is Debian based for the hypervisor.
As far as what you do with it, is that you can in theory replace the VPSs or test software in your lan.
to compare, i have my router (vyos), homeassistant, a docker server for hosting small services, a network lab (gns3), windows and mac VMs, and more running on a cluster that is using similar hardware.
Use your own router, if you don’t want your traffic/activity watched, you must use a VPN. There are several routers that have built in VPN clients, that should be more convenient then per client VPN.
For reference on what your ISP is using to watch your traffic from the subscriber through the core and to the internet, you will want to read about sflow/netflow, which reads packet headers. Technically, the ISP can capture all traffic and would have the full ability to read unencrypted data. There is also the ability to do MITM TLS shenanigans, but typically you see that at the enterprise level as end devices need to trust the certificate issued to the proxy. Also note that there is such thing as lawful intercept, which in the US means that law enforcement agencies can also snoop your traffic “with a court order” at any point, often without the ISP being explicitly notified.