A server is just a computer like any other that connects to other computers through the internet and shares data back and forth. It stores its info in hard drives so yes, they can definitely fill up. But just like other computers they be upgraded with more storage space if that happens.

The cost ranges wildly depending on how powerful a server you need. I’ve used my 10+ year old lenovo as a server and it probably isn’t worth much. Conversely, I’m sure some professional server stacks can get quite costly.

As for if lemmy.world needs more, I can’t say. That would be up to the maintainers of that instance to comment on.