The server where you bought the domain probably offers hosting services but usually at a cost. If you want to do it for free, have your domain redirected to whatever free web service you decide to use for your website. Remember, free sites are limited in the number of pages and can have a lot of ads. On the other hand, hosting your own website as in Method 2 above, or having your site hosted where you bought and keep the domain, allows you to pretty much create as many pages as you want, without any advertising you don't put up for yourself.
You are made to choose from a selection of templates and later get to edit them to your liking. But not everyone enjoys this! Some people prefer to have more customization and perhaps use a different content management systems like WordPress. For these people, a website builder is not a preferable choice, as they won’t develop the skills needed to make a professional page.
If you're not sure of the type of hosting your business needs, you might want to start small, with shared Web hosting. You can always graduate to a more robust, feature-rich package of, say, VPS hosting or even dedicated hosting in the future. Unfortunately, some hosts don't offer all hosting types. Consider how much you expect to grow your website, and how soon, before you commit to anything longer than a one-year plan. It's worth spending the time up front to make sure that the host you select with is able to provide the growth you envision for your site, as switching web hosting providers midstream is not a trivial undertaking.
Domain names can be used in a number of ways. Direct visitors to your website’s home page or use complementary domains to send them to specific areas of your website ( e.g. yourcompany.jobs for a careers page). Or, forward a custom domain to an existing social media account, like your Twitter profile or Periscope channel. With a domain name you can even set up custom email addresses like yourname@yoursite.social, which can be used to conduct business or communicate with your followers. More.
Beyond that, Dreamhost is a 5-of-5 hosting company for many reasons. They operate their own control panel, which is convenient and easy to understand. While phone support isn't available 24-7, they are responsive to chat and tickets. The company uses superfast SSDs for all their storage, has a free SSL certificate (for more secured web browsing), and provides SSH access for those plans that are intended for more technical users.
At FatCow, we understand that it takes more than impressive technology to be a top host; it takes a great team of people. Over the years, the Moo Crew, FatCow's customer support team, has developed a reputation in the industry for going the extra mile for customers. The Moo Crew is available 24x7, 365 days a year and can be reached via phone, email or online chat.

Migration or transfer services are often free or offered at a reasonable fee. These services help move your existing site to the new hosting provider. They can save a huge amount of hassle. Just remember that the migration process is often automated, and may fit in with the host's processes and needs rather than yours. Not everything may migrate, and you may find the organization of the newly migrated site makes for harder maintenance in the long run.
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