Hosting multiple WordPress sites on single server – best practices?

Based on your needs, yes: you should probably be using a Network (WordPress with MultiSite enabled).

  • All network sites run the same version of WordPress
  • Each network site can activate its own Plugins. You can explicitly allow each site to manage its own Plugins.
  • Each network site can have access to different Themes (though you will have to manage access to each Theme via the Network Admin.
  • Users can be managed such that each sites users are mutually exclusive
  • Upgrades of WordPress core, Themes, Plugins, and network sites is all managed from a single location in the Network Admin
  • Super Admin is part of a Network install, and allows granular control over each network site, Plugins, Themes, and users.

As for how to set up a Network, everything is incredibly well-documented in the Codex.

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