Both are optional. But
- you may use CDN to get a bit faster loading times for global audience (in theory anyway; when and where to use CDN is wider question)
- you can use external ones for uploads, like S3, DigitalOcean Space etc. to save local space, because those have tendency to be a bit cheaper
Do what you do, but don’t install Discourse itself on Amazon unless you know very well what you are doing.
How big VPS for Discourse you need is really hard question. It depends - how many calls/visits/users it must handle.
And money is another relative question. For business such costs are different thing than if one is operating on hobby level. And it depends how important a forun is - is 98% uptime enough or is 99,9% needed (and needed is different thing than wanted; wanted things are quite often really expensive).