@Dilan Nanayakkara Thanks for reaching out and apologies for delay on this.
1) You can choose which machines OU to sync with Azure AD to put them in Hybrid Azure AD Join state. The OUs containing computer accounts which are synced will only get converted to Hybrid AADJ.
2) Not for servers but for normal machines you can advantages like : https://learn.microsoft.com/en-us/azure/active-directory/devices/concept-azure-ad-join-hybrid
a)SSO to both cloud and on-premises resources
b)Conditional Access through Domain join or through Intune if co-managed
c)Self-service Password Reset and Windows Hello PIN reset on lock screen
d)Enterprise State Roaming across devices
3) It totally depends on your requirement, but here is one blog to dig down further which you might find helpful
https://joymalya.com/azure-ad-join-vs-hybrid-azure-ad-join/
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