Q1: So which method should I use…
a: Set-up the one domain as a WordPress-Multi-site ?
b: Install each WordPress-site individually, ie, without using the WordPress-Multi-site option ?
Both will satisfy your requirement
Q2: If I use (b) I gather that each installed WordPress-site would need its own database ?
Yes and no, so long as the table prefixes are all different they will happily coexist in a single install. Though I would advise for backup purposes they have separate databases.
Q3: What is the practical difference between the two options ?
Multisite has a shared user table, and it’s a single codebase rather than multiple codebases. You’ll get a new super admin type of user and a network admin. However I would encourage you to ask this as an independent question, as your original question is already in danger of becoming too broad
Q4: What are the pros & cons ?
This has already been answered here:
Is there an advantage of using multisite if I have multiple WordPress websites for myself?
Q5: Which is the most reliable ?
This is a wild goose chase question, any difference in reliability is so miniscule as to be of no value for your decision making process ( e.g. should I use ice cubes from Canada, or Ice cubes from Norway in my $5 beer ).
Both are well tested and actively used by huge numbers of people.