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World simulation (ticks) is single-threaded, but things like world generation are multithreaded. I'd recommend Paper as server software as it's more performant out of the box (vs. vanilla) and configurable (ex. how many threads world generation is allowed to use).
If you host multiple worlds I recommend spinning up a Paper instance for each world separately and connect them with Velocity.
Ryzen 7000 should have better single-threaded performance than your i5-9500 but as it's a VM ymmv depending on whether Sparked Host overprovisions their machines.
Only if you don't play technical minecraft with sensitive redstone arrangements.
OP, if you want performance and redstone, use a fabric server.
Fabric with some performance-enhancing mods is a great choice as well, yes! I've been wanting to test it on my server for a while now, just haven't got around to it yet.
Paper changes some of the more quirky vanilla redstone behavior, although - again - it's very configurable so some of that original behavior can be restored.
I'd mostly base it on which plugin/mod ecosystem you prefer/require.
I have definitely considered Fabric Server. It might give me opportunities for some smaller mods later.
Fabric servers can even run on RPi (within reasonable parameters) and it has nice documentation.
Pro-tip: Use docker to maintain your Minecraft server. Much easier.