It all depends on how many/which plugins you’re using. My wife had one plugin on her site (http://linuxgurl.com) that maxed out RAM. Removing it made my server run like a dream.

I’d recommend testing with ApacheBuddy, which will help you optimize HTTPD for your load/usage.

For me it turns out that one of my websites (which doesn’t get much traffic yet) just needs a whole lot more horsepower than all the other ones, which I confirmed via Loadimpact.com. Unlike my first upgrade from $5 to $10 (which made very little difference in regards to performance), my latest upgrade at $20 has proven to be the difference between heaven and earth (at least so far). There was also a temporary spike in traffic for one of my simple websites before the last upgrade, and the server handled it with flying colors. So it depends more on the number & complexity of plugins vs. the number of websites.

Can handle many websites, but the keyword is Optimization, use a cache like Varnish, use a better webserver like nginx and fpm-php, use services like cloudflare (DO use it for its whole site), and replace mySQL for Percona. You can optimize a lot these Droplets, all you need is some time and you will be able to handle many websites with thousands of visitors daily.

Depends on your traffic and web stack configuration. If you use Wordpress Super Cache plugin and Nginx you should be able scale much better, check out my benchmarks on my Wordpress blog with 2GB DO VPS http://wordpress7.centminmod.com/ :)