The line of thinking you follow is what is plaguing this industry with too much complexity and simultaneously throwing away incredible CPU and PCIe performance gains in favor of using the network.
Any technical decisions about how many instances to have and how they should be spread out needs to start as a business decision and end in crisp numbers about recovery point/time objections, and yet somehow that nearly never happens.
To answer your points:
1) Not necessarily. You can stream data backups to remote storage and recover from that on a new single server as long as that recovery fits your Recovery Time Objective (RTO).
2) What's the benefit of multiple AZs if the SLA of a single AZ is greater than your intended availability goals? (Have you checked your provider's single AZ SLA?)
3) You can absolutely do rolling deploys on a single server.
4) Using one large server doesn't mean you can't compliment it with smaller servers on an as-needed basis. AWS even has a service for doing this.
Which is to say: there aren't any prescriptions when it comes to such decisions. Some businesses warrant your choices, the vast majority do not.