Selfhosted
A place to share alternatives to popular online services that can be self-hosted without giving up privacy or locking you into a service you don't control.
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I actually gave Debian a go and I get the hype. Compared to Arch its a dream to set up and work with. Somewhere down the road I might go back to it.
Proxmox - it looks great but I think its overkill for what I need. I can run most things in Docker - I don't really need virtualization. At some point in the future I'd like to try it and have TrueNAS virtualized on top to manage the NAS side of things.
There's not really particular thing (or things) that are insurmountable/unbearable with Arch. Its more the experience. But I love it and hate it in equal measure ha.
What I like about running a hypervisor and true vms is that I can fool around with some vms in my server without risk of disrupting the others.

I run most of my dockers in one VM, my game servers in another and the Jellyfin instance on a third. That allows me to fool around with my portainer instance or game servers without disrupting Jellyfin and so on.
Part of it is that I'm more used to and comfortable in managing vms and their backup/recovery compared to LXCs and Dockers.
Im running a similar setup (ZFS pool, Cockpit, portainer x2, and a few LXCs for Plex, Frigate, etc) and it's been great. Before building it early this year, I'd been running everything on Windows for the decade prior because I was unfamiliar with Linux and struggled like OP when problems arose, but after following a guide to get everything setup it's been rock solid and if I screw anything up I can just load a backup. I'd also looked into TrueNAS and Unraid but this gives me a more flexible setup without any extra cost and the ability to tinker without affecting anything else like you said.