These questions are impossible to answer without more detailed knowledge about the databases and the applications using the databases.
What I can say is that it sounds a little odd to me that someone would do this in 2021. Many organizations would rather look into migrate the databases to the cloud, for instance Azure SQL Database. Now, since the feature set is not fully one-to-one between Azure SQL and the box version of SQL Server, this is not always easily achieve by just moving the databases to the cloud.
Maybe you have already considered the cloud and dismissed that option, and with good reasons. Still this is a step that surprises me.
But as I said, there is a lot of "it depends" here. Do these applications/databases talk with each other? What are the security considerations? Are all users expected to have access to all databases? Or are some databases very sensitive?