I just set up a droplet and got its IP address. Now, I know for adding a domain under this droplet: I need to update the name servers of my domain from domain registrar. I did it.

1. Now, coming back to domain configurations, the hostname equals my domain name but, what is the meaning of custom Ip or droplet ip there?
3. Secondly, when I’ll sub domain under that domain then, hostname equals my subdomain.mydomain.etc but again, what would be the IP address next to it?

Please, clear me with these confusions.
Looking forward to a response. Thank you!