You definitely should try something with an actual desktop. It sounds like you’re wanting a headed server with virtualization capabilities. I’d personally run LXD or KVM and LXC if I needed a type 2 hypervisor and containers like what you’re saying. Luckily, a ton of distros support both of these at this point.
Btw, proxmox utilizes KVM and LXC on the backend. So the only difference is that you’re leveraging the tools directly. If you’re a CS student then learning the underlying tools is the best way to learn about a system and how it all interacts.
There are plenty of uses for it. There are also plenty of bad implementations that don’t use it in a way that helps anyone.
We’re going through an overhyped period currently but we’ll see actual uses in a few years once the dust settles. About 10 years ago, a similar thing happened with AI vision and now everyone has filters they can use on cameras and face detection. We’ll reach another plateau until the next tech hype comes about.