There’s no way to disable the compositor, so if you play any windowed games, you’ll have some extra input lag.
The reason compositors historically increase input lag so much is due to design flaws in Xorg. With VRR Wayland has comparable input lag to Xorg with no compositor, and it’s only slightly worse than Xorg without VRR. In the best case scenario Wayland can have better input lag than uncomposited Xorg: there’s a reason the Steam Deck uses Wayland in game mode.
I think as of recently Wayland with compositing might actually have better input lag than Xorg without compositing, but I haven’t seen any thorough benchmarks in the past few months.
Debian is the classic server choice. If you don’t have any server administration experience, I’d consider it just for that reason: there should be a ton of resources available. If you want something else, any RPM-based distro (like Fedora Server, CentOS Stream, Rocky Linux, or even RHEL) could be another option, with Rocky Linux probably being the best choice out of those.
Alternatively, I’d consider NixOS or Alpine. NixOS is what I use on most of my servers, however both have attributes that might make them worse for a beginner. NixOS uses a custom programming language to configure the operating system, while Alpine is much more minimal than most other server distributions. On the off chance that you have experience with a functional language like Haskell, though, NixOS might be the best choice, since it having a unified configuration for the whole system makes it very convenient for hosting usecases.
I’d also like to note that I run both a single-user Mastodon and Lemmy instance, and find them both fairly easy to manage. There’s also GoToSocial, which is specifically designed to be easy to deploy.